By Joe Palazzolo
- Bloomberg
- Rajat Gupta, left, and his lawyer Gary Naftalis
According to prosecutors, on Oct 23, 2008, then Goldman Sachs director Rajat Gupta called Raj Rajaratnam, founder of the hedge fund Galleon Group, and passed him a tip that the bank was going to report its first quarterly loss ever as a public company.
Phone records show that Mr. Gupta called Mr. Rajaratnam at 4:48 p.m., 23 seconds after disconnecting from a Goldman conference call in which directors were told that the bank had lost nearly $ 2 per share. The call between Mr. Gupta and Mr. Rajaratnam lasted 13 minutes, according to prosecutors.
The next day, Galleon Tech Funds sold its long position in Goldman stock — about 150,000 shares — and avoided a loss of several million dollars.
According Mr. Gupta’s Oct. 23 calendar, which was recently admitted into evidence in his trial, his day started in Barcelona and ended in Westport, Conn., with several conference calls and meetings sandwiched in between. Check it out:
Mr. Gupta’s lawyers say there is no evidence the conversations included confidential board information, and that other Goldman insiders who had relationships with Mr. Rajaratnam could have tipped him.
Mr. Gupta is charged with conspiracy and securities fraud. Mr. Rajaratnam was convicted in an insider trading trial last year and sentenced to 11 years in prison.