NEW YORK: Former Goldman Sachs director Rajat Gupta will not testify in his own defense at his insider trading trial, a decision taken after “substantial reflection and consideration”, his lawyer has told a federal court here.
In a one paragraph letter dated June 10 to Judge Jed Rakoff, who is presiding over the case in Manhattan federal court, Gupta’s lawyer Gary Naftalis said his team had spent the weekend “reviewing what we believe we need to present in the defense case”.
“After substantial reflection and consideration, we have determined that Gupta will not be a witness on his own behalf in the defense case,” Naftalis said.
Naftalis had last week told the court it was “highly likely” that Gupta would take the witness stand in his defense on June 12.
The prosecution rested its case last Friday after Goldman Sachs CEO Lloyd Blankfein finished his testimony.
The judge had instructed Naftalis to inform the court and the prosecution about whether Gupta would take the witness stand as soon as he had taken a decision in order to give the prosecution time to prepare.
The defense began its case by showing a recorded video deposition of Gupta’s “close friend” Ajit Jain, the reinsurance head at Berkshire Hathaway.
Jain is seen as a possible successor to Berkshire’s billionaire chief Warren Buffett.
The prosecution has alleged that Gupta, who sat on the boards of Goldman Sachs and Proctor and Gamble, passed on confidential information about Buffett’s plan to invest USD five billion in Goldman Sachs during the height of the financial crisis in 2008 to convicted hedge fund founder Raj Rajaratnam. . When the court resumes on Monday, the defense will continue showing the video deposition of Jain.
About six character witnesses would be testifying for the defense, including one of Gupta’s four daughters.
Naftalis is expected to wrap up his case by Tuesday and closing arguments by both sides would be made on Wednesday.
The case will then go to the jury for deliberations.
Gupta has pleaded not guilty to security fraud and conspiracy charges that he passed confidential board information to hedge fund founder Rajaratnam.
The Sri Lankan co-founder of the Galleon group was convicted last year on insider trading charges and is currently serving an 11 year prison sentence.
If convicted Gupta faces up to 25 years in prison.
His family and friends have been regularly attending the trial, which began on May 21.
His wife and four daughters have sat behind him in the spectators’ bench in the courtroom.
The prosecution presented phone records, emails, stock information to show Gupta’s relationship with Rajaratnam.
According to phone records, calls were made from numbers associated with Gupta to Rajaratnam’s lines just seconds after Gupta got off from Goldman and P&G board meetings.
Rajaratnam then traded on the basis of information the government alleges he received from Gupta making millions of dollars of profit and avoiding losses.
Gupta’s defense has argued that the evidence against him is circumstantial and Rajaratnam had other sources in Goldman who could have shared the secret corporate information before it became public.
Naftalis has said Gupta had a falling out with Rajaratnam after the hedge fund founder lost USD 10 million of Gupta’s investment in the voyager fund. -PTI