A person at Goldman Sachs Group Inc, who has not been identified or charged in a broad U.S. insider-trading probe, was caught on a wiretap leaking secrets about Intel Corp and Apple Inc, a lawyer for former Goldman board member Rajat Gupta said in court on Friday.<\/p>\n
Lawyer Gary Naftalis, in a heated exchange with U.S. prosecutor Reed Brodsky during a pre-trial hearing, said the Goldman person leaked confidential information about the two companies to Raj Rajaratnam, the Galleon Group hedge fund founder convicted of insider-trading charges last year.<\/p>\n
Gupta, the best-known corporate executive accused in a sweeping prosecution of insider-trading at hedge funds in recent years, denies criminal charges that he tipped Rajaratnam with Goldman Sachs and Procter & Gamble Co secrets between 2007 and 2009. His trial is scheduled to begin in May.<\/p>\n
“In a letter he (Brodsky) said the government had a person who provided confidential information to Raj Rajaratnam about Apple and Intel,” Naftalis said. “There is also wiretap evidence, substantial evidence of another source at Goldman Sachs.”<\/p>\n
Naftalis told U.S. District Judge Jed Rakoff that the defense believed “there is a much more circumstantial case that person should be sitting in the box rather than us” and “the wrong man is on trial here.”<\/p>\n
A theme of Gupta’s defense is that the charges brought by U.S. prosecutors last October are circumstantial and that Rajaratnam had a host of sources tipping him with information. A jury convicted Rajaratnam largely on wiretaps, which traditionally have been used in organized crime and narcotics cases, not white-collar investigations.<\/p>\n
Rajaratnam, once a friend of Gupta’s, is serving an 11-year prison sentence. Gupta was onetime global head of McKinsey & Co and sat on the boards of several companies.<\/p>\n
The judge ended the late afternoon hearing in Manhattan federal court, but Brodsky and Naftalis continued to argue. Brodsky declined to comment.<\/p>\n
A Goldman Sachs spokesman, Michael DuVally, declined to comment.<\/p>\n
Goldman has been in the spotlight this week with the public resignation of employee Greg Smith, who said in a New York Times op-ed that Goldman had become “as toxic and destructive as I have ever seen it” and was a place he no longer wished to work.<\/p>\n
A person familiar with the Gupta case said in early March that prosecutors are investigating David Loeb, a managing director of Goldman Sachs. Loeb works with technology hedge-fund employees, including an Asia-based analyst, Henry King, who is also under investigation, according to another source briefed on the case.<\/p>\n
The sources declined to be identified because the matter is not public. Neither Loeb nor King has been accused of any wrongdoing and neither responded to emails asking for comment.<\/p>\n
The insider-trading case has drawn in Goldman Sachs Chief Executive Lloyd Blankfein, who was interviewed under oath on February 24 as a witness, according to court documents.<\/p>\n
Blankfein testified for the government at Rajaratnam’s trial. He is also expected to be called as a witness by the government at Gupta’s trial.<\/p>\n","protected":false},"excerpt":{"rendered":"
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