In the one day of the trial between Blankfein바카라s first and second appearance in the court (when he was having lunch in Yonkers), the prosecution had focused on Gupta바카라s involvement in Voyager Capital Partners. He had invested $5 million when Voyager was set up in 2005 and later exercised an option he had had and put in another $5 million. But the 2008 market collapse wiped out his investment. The prosecution called several witnesses, including former Galleon employees, to testify and piece together what happened at Voyager.
Voyager was a so-called fund-of-funds that invested in several Galleon funds. Some of these funds had investments in Goldman Sachs. Therefore, the prosecution was implying, Gupta stood to gain financially by passing on secret Goldman information to Rajaratnam.
Voyager performed brilliantly at first, returning about 41 per cent annually in its first couple of years. But the $400 million fund, which was highly leveraged, blew up during the financial crisis.
At the end of 2007, Gupta and Rajaratnam got into a dispute over the value of Gupta바카라s stake in Voyager. Rajaratnam felt that the profits on Gupta바카라s second $5 million investment should be calculated from the day he had exercised his option to up his stake and put in the money. Gupta, however, insisted that his share should be computed from the date of the inception of the fund. If one used Rajaratnam바카라s methodology, Gupta바카라s stake worked out to about $12.5 million, while by Gupta바카라s logic it was $16.4 million. In the end, Rajaratnam gave in and agreed to the higher figure.
The prosecution was determined to cover every detail in the dispute, including the complex calculations. Many documents were produced, witnesses were asked to validate them and explain their arcane nuances to the jury. This took up the entire day. By the time court adjourned, the jury바카라s eyes had glazed over, and Judge Rakoff had described the proceedings as 바카라excruciating바카라.
The next day, before Blankfein was called to the stand, government witness James Barnacle Jr, an FBI agent, took the jury through a long series of charts that summarised all the evidence that the prosecution had presented바카라the timelines, the phone call records, the trades made by Galleon and the supposed illegal profits that it had made on these trades, the dates when the information Galleon was alleged to have traded on the basis of became public, and so on.
During cross-examination, defence lawyer David Frankel produced the details of two money-losing Goldman and Procter & Gamble trades that Galleon had made after Gupta had allegedly tipped off Rajaratnam. Frankel pointed out that the FBI바카라s charts were misleading, since they did not document any loss-making trades that Galleon had made. 바카라So you made charts for trading profits but not for losses, correct?바카라 Frankel asked Barnacle. 바카라No, I did not,바카라 the FBI agent said.
Once Blankfein바카라s testimony was over, the government had no more witnesses to call. But as a final set of evidence, the prosecution played several secretly recorded voice mail messages left by Gupta on Rajaratnam바카라s cellphone. In one of these messages, on October 10, 2008, Gupta says: 바카라Hey Raj, Rajat here. Just calling to catch up. I know it must be an awful and busy week. I hope you are holding up well. Uh, and I바카라ll try to give you a call over the weekend just to catch up. All the best to you, talk to you soon. Bye bye.바카라
Gupta바카라s lawyers had been arguing from the outset that by October 2008, his relations with Rajaratnam were extremely strained, following the Voyager fiasco. Why then was Gupta sounding so friendly on the voice mail?
Lead prosecutor Reed Brodsky now rested the government바카라s case.
There was still about an hour of court time left. Rajat Gupta바카라s defence utilised that to show the jury the videotaped deposition of Ajit Jain, a top Berkshire Hathaway executive. There were several similarities between the stories of Guota and Jain. Both were India-born, had studied engineering at IIT and then done an MBA from Harvard Business School. Like Gupta, Jain had also joined McKinsey from Harvard. Today, he runs Berkshire바카라s massive reinsurance operations, and is widely tipped to succeed Warren Buffett at the helm when the Sage of Omaha, who is now in his 80s, decides to retire.
Jain, who described his relationship with Gupta as 바카라completely social바카라, spoke about a lunch they had at Stamford, Connecticut, where Jain is based, in January 2009, in the course of which Gupta told him about his falling out with Rajaratnam. 바카라He told me that he had $10 million invested and he had been gypped, swindled and cheated by Raj and had lost his $10 million,바카라 said Jain. He said he 바카라shocked바카라 to hear of this, and the conversation 바카라left (him) with the impression바카라 that it was not just a bad investment or loss of money but 바카라a deliberate hanky panky on the part of Rajaratnam바카라. He also acknowledged, in response to a query by Gary Naftalis, that it was 바카라unusual바카라 for Gupta to tell him about his lost investment.
Naftalis had now established for the jury the acrimony between Gupta and Rajaratnam, and from an unimpeachable source. But the conversation Jain had reported had taken place in January 2009, several months after the last time Gupta had allegedly tipped off Rajaratman. Anil Kumar had testified that Rajaratnam had given him the impression that the falling out occurred sometime in February or March 2009. Clearly, it had taken place earlier. But the defence had not yet been able to present any evidence that it had happened early enough to exonerate Gupta.
Late in the evening, after court had adjourned, Gary Naftalis told the media that it was 바카라highly likely바카라 that Gupta would testify in his own defence in the coming week.
On the next day of hearings, Gupta바카라s defence team produced several witnesses to testify about his character. Ashok Alexander, a former McKinsey colleague who now headed the Bill & Melinda Gates Foundation in India, had flown in from Delhi. Another witness was Anil Sood, a former senior World Bank executive, who had known Gupta for more than half a century, having been his classmate in school since fifth grade, and then at IIT Delhi. Soon after Gupta was indicted, Sood had written a long piece on friendsofrajat.com, expressing his confidence that 바카라Rajat will emerge successfully from this totally uncalled-for ordeal and go on to do what he has done all his life바카라being a good human being, helping others, and contributing to make the world a better place.바카라
바카라I have admired Rajat바카라always바카라and my admiration for him has grown over the years,바카라 he wrote. 바카라His respect for all human beings comes through in every aspect of his personal and professional life바카라He has always been a person of the highest integrity and stood up for what is right바카라What Anita, Rajat and the family have endured in recent months is grossly unfair and unjust바카라a lifetime of achievement maligned by unproven hearsay. The picture of him that has been painted by some is simply NOT of the Rajat I have known well for half a century. The situation has been very difficult for his family and also for all of us friends who care for him deeply. Rajat, supported by his family, has shown tremendous grace and dignity in the face of this most difficult challenge of his life.바카라 In his testimony in Judge Rakoff바카라s court, he said that Gupta 바카라inspires trust and confidence바카라.
During cross-examination, prosecutor Reed Brodsky asked both Alexander and Sood if they had known about any investments or business dealings that Gupta had had with Rajaratnam. They said they had not.
More important, in terms of pure information, was the testimony of Suprotik Basu, a public health specialist who is a UN envoy on matters related to malaria, and who had been with Gupta on September 23 2008, the day he allegedly called Rajaratnam and told him about Warren Buffett바카라s investment in Goldman Sachs.
How did he first meet Gupta, asked Naftalis.
바카라(In January 2008) I got an urgent call that a businessman wanted to end all childhood deaths from malaria by 2025,바카라 said Basu.
A prosecutor jumped to his feet and objected. The objection was sustained.
Naftalis used Basu to walk the jury through Gupta바카라s busy calendar on that fateful day. Gupta and Basu had met at five in the evening, an hour and few minutes after the Goldman Sachs board meeting wound up. They had a conference with Julian Schweitzer, the World Bank바카라s head of health nutrition, and Raymond G. Chambers, the United Nations special envoy for malaria. Basu then accompanied Mr. Gupta to a dinner honouring the health minister of Ethiopia at a Midtown Manhattan restaurant.
Basu told the jury that he had seen Gupta many times with 바카라earpiece in his ear constantly returning phone calls between meetings바카라. This fitted in with Gupta바카라s lawyers바카라 argument that given the packed schedule that characterised a typical day for Gupta, it was his normal practice to use breaks between meetings to make and return phone calls. So there was nothing unusual or suspicious about him calling Rajaratnam right after the Goldman meeting ended.
Naftalis asked Basu whether he had heard Gupta referring to Goldman Sachs or Warren Buffett that day. He had not.
The prosecution now went over the phone records again for the jury바카라the records showed that Gupta and Rajaratnam had spoken to each other at least six times on that day, including the fiftysix-second conversation right after the Goldman board meeting.
Brodsky asked Basu if he was present for that call. Basu said he wasn바카라t.
Late in the day, Gupta바카라s eldest daughter Geetanjali took the stand.
The thirtythree-year-old Geetanjali told the jury that she was an alumnus of Harvard College, Harvard Business School and Harvard Law School, and worked for the Harvard Management Company, which oversees the investment of the university바카라s endowment.
But that was about all that she could tell the jury that day. Naftalis began asking her about a conversation she had had with her father in 2008 about his troubles with Rajaratnam, and the prosecution objected to the line of questioning. After some bickering, Judge Rakoff decided to hear out the defence and prosecution in a private conference. Geetanjali would have to continue her testimony the next day.
After listening to the arguments from both sides about what she could say, Judge Rakoff ruled that Geetanjali could testify about her observations of her father바카라s reaction to his Galleon involvement, but she was not permitted to recount statements Gupta had made to her.
The defence had by now clarified that Rajat Gupta would not testify. Financial Times quoted Judge Rakoff as saying, of the defence바카라s decision to call Geetanjali instead: 바카라It바카라s a bit of a gimmick.바카라 However, he then added that 바카라it바카라s within their tactical right바카라.
Of Geetanjali바카라s testimony, a New York Times (12 June, 2012) journalist noted admiringly: 바카라Geetanjali Gupta바카라s education at Harvard Law School may not have included a class on how to testify, but she was poised and articulate in answering questions on the witness stand on Tuesday at her father바카라s criminal trial.바카라
Geetanjali told the jury that she was at her parents바카라 house at Westport, Connecticut, on September 20, 2008, three days before the Goldman Sachs board meeting on the Berkshire investment. She was sitting in the library with her father when he spoke to her about his problematic $10-million investment in Voyager. 바카라'He was upset,바카라 said Geetanjali. 바카라He was running his hand through his hair, as he often does when he is stressed바카라He is usually a very calm and collected person.바카라
The defence showed the jury an email from October 2008 that she had sent her father asking for his help in landing her friend a job at the Dell family foundation. In the mail, which began 바카라Hi Baba,바카라 the Bengali word for 바카라father바카라, she asked: 바카라How bad are things with the Raj fund?바카라'
By Thanksgiving바카라or late November that year, Geetanjali said, the whole family was discussing the investment. She said that her father was 바카라depressed, withdrawn and not himself바카라.
This is how The New York Times described her cross-examination:
바카라On cross-examination, Reed Brodsky, a prosecutor known for histrionics in the courtroom, reduced his voice to almost a whisper. He asked her two questions.
바카라바카라Do you love your father?바카라
바카라바카라Yes,바카라 she replied.
바카라바카라Would you do anything for your father?바카라
바카라바카라I would do anything for my father, but I would not lie, though, on the stand,바카라 she said.바카라
Brodsky retreated. Geetanjali returned to her seat in the first row of the visitors바카라 gallery. When the jury left the courtroom, she went up to her father. For nearly three weeks, Rajat Gupta had sat with his lawyers, his ruggedly handsome face never betraying any emotions. But as he stood up to gather his daughter in his arms in a loving embrace, his eyes welled up with tears.
Over three days, the defence had summoned a dozen witnesses, but most of them had been called to tell the jury that they believed Gupta to be a person of unshakeable integrity, and to mention his tireless commitment to a dizzying number of philanthropic causes. In the final analysis, other than Geetanjali바카라s testimony, the principal thrust of the defence바카라s case had been that a jury could not convict a man of such impeccable credentials in personal, professional and public life on the basis of evidence that was, whichever you looked at it, circumstantial.
For the prosecution, Assistant US Attorney Richard Tarlowe did the summation of arguments. He told the jury the government바카라s story all over again, distilled from phone records, minutes of board meetings, trading records and masses of email. He displayed charts that showed the sequence of events바카라Gupta participating in board meetings of Goldman Sachs and Procter & Gamble, Gupta calling Rajaratnam, Galleon buying or shorting shares to make quick profits. These were not coincidences, he told the jurors.
On September 23, 2008, there was only one call made to Rajaratnam바카라s work phone in the final ten minutes of trading, 바카라and that call was from Gupta,바카라 said Tarlowe. 바카라That evidence is devastating.바카라
He replayed the September 24 wiretapped conversation in which Rajaratnam gloats to a colleague that he was told at 3:58 p.m. that 바카라something good might happen to Goldman.바카라
Gupta was going to be chairman of Galleon International, Tarlowe said. In fact, he had started telling potential investors that he was chairman, even before the appointment had been officially made. He was going to start a new fund with Rajaratnam, where he would have a stake and a share of the 바카라extraordinary profits바카라 that the fund would make, based on insider trading. 바카라Rajaratnam offered Gupta many benefits,바카라 Tarlowe said. 바카라What was good for Rajaratnam and Galleon was good for Gupta.바카라 Indeed, when they had a dispute about Gupta바카라s stake in Voyager, the fund they had already set up together, Rajaratnam acceded to his demand, and 바카라bumped up바카라 his stake by $4 million. This was actually Gupta바카라s reward for informing Rajaratnam about what went on in the board meetings he attended.
The witnesses the defence had called had known nothing about Gupta바카라s relationship with Rajaratnam. 바카라Those witnesses shed absolutely no light,바카라 said Tarlowe.
The defence would argue, Tarlowe told the jury, that this was all circumstantial evidence, but in this case, circumstantial evidence was as strong as eyewitness testimony. The defence had been claiming that Gupta would never pass on tips to Rajaratnam after he had lost his $10 million investment in Voyager. The defence was wrong. There was even more incentive for Gupta to engage in an illicit relationship with the Galleon boss, said the prosecutor. It was simple. Gupta would want to recoup his losses, make his money back.
바카라Gupta abused his position as a corporate insider by providing secret company information to his longtime business partner and friend, Raj Rajaratnam,바카라 said Tarlowe, his voice rising towards the end of his speech, as he tried to impress upon the jury the seriousness of Gupta바카라s crimes. These leaks allowed 바카라Rajaratnam and his criminal associates at Galleon바카라 to make millions of dollars through illicit trades, he said, and there was 바카라overwhelming evidence바카라 to support this.
In the defence summation, Naftalis repeatedly pointed out to the jury, as he and his team had throughout the trial, that the government had not been able to present any direct evidence. 바카라With all the power and majesty of the United States government, they found no real, hard, direct evidence,바카라 he said. 바카라They didn바카라t find any because it didn바카라t happen.바카라
바카라The prosecution failed here to prove that Mr. Gupta acted knowingly and wilfully and with any specific intent to defraud,바카라 he said, going back to the essence of what Gupta had been charged with. No one had accused Gupta of trading illegally, there was no evidence that Rajaratnam was paying anything secretly, there was no witness at all to any of the tips the prosecution was claiming Gupta had given the hedge fund manager. 바카라No cash changing hands here,바카라 Naftalis said. 바카라No dishonest dimes ending up in Mr Gupta바카라s jacket.바카라
바카라As they say in that old commercial, where바카라s the beef in this case?바카라 the lawyer asked. 바카라If you put in a lot of paper, you give the illusion that you might have something more than you actually have바카라an illusion of making something out of nothing. That is a gambit that can bamboozle people into thinking something was proven when it wasn바카라t. Heaps of pointless paper and 바카라a parade of meaningless witnesses바카라 was how Naftalis described the prosecution바카라s case.
바카라We don바카라t punish people for making mistakes, for being negligent, for trusting people, for not being smart enough to see through somebody that it took eight months of wiretaps for the government to find,바카라 he said. Till his arrest, Rajaratnam was a star, a man admired by the business community for his success. No one knew that he was using dishonest means. Gupta had been deceived too, just as the rest of the world was. 바카라There was a secret world of Raj Rajaratnam that was unknown to Rajat Gupta,바카라 said Naftalis. 바카라Our law does not make people criminals based on guilt by association.바카라
In the eight months that the FBI had tapped Rajaratnam바카라s phones, the agency had not been able to catch a single conversation that in any way indicated that Gupta was involved in Rajaratnam바카라s illegal activities. All the government had was some phone records, and 바카라there was no evidence of what was said in any conversation. There is not a single wiretap recording out of those thousands of wiretapped calls where Rajat Gupta gave any inside information. None, zero.바카라 The most that the government had was some unreliable 바카라boasting바카라 by Rajaratnam and 바카라second- or third-hand hearsay바카라.
What were the facts? One, that Rajaratnam had cheated Gupta on the Voyager deal; Galleon records showed that Rajaratnam had withdrawn large sum of money from the fund without telling Gupta. Two, Gupta had wanted to step down from the Goldman Sachs board on September 12, 2008. This was before the phone calls Gupta made to Rajaratnam to supposedly give him insider tips. In fact, it was Goldman Sachs chief executive officer Lloyd Blankfein who had convinced Gupta to stay back.
바카라This resignation drives a stake through the heart of the government바카라s case,바카라 Naftalis said. 바카라He resigned. They begged him to come back. The only reason that he stayed is Goldman Sachs panicked, because Rajat Gupta is a prominent and respectable business leader. His resignation might cause panic in investors in a volatile market.바카라
And what about Blankfein? He was 바카라a man with no memory of anything바카라 and had been 바카라less than candid.바카라 바카라I suggest to you that no one could be that cold and callous and not remember that he fired three thousand people, as if it happens every day,바카라 Naftalis said. 바카라If you can바카라t remember firing three thousand people without any kind of notice, how can you pretend to remember anything about some posting call?바카라
Throughout his closing, Naftalis stressed that the government had the burden of proving its case beyond a reasonable doubt. If the government did not meet that high burden, he told the jury, 바카라It바카라s your duty to say not guilty, or, as they say in Scotland, not proven.바카라
He ended his summation by talking about his visit to one of the oldest courthouses in England. Written on the walls of the basement, he recalled, were the words: 바카라In this hallowed place of justice, the Crown never loses because when the liberty of an Englishman is preserved against false witness, the Crown wins.바카라
바카라The United States,바카라 Naftalis said, 바카라always wins when justice is done.바카라
The prosecution바카라s rebuttal of the defence바카라s closing arguments was done by Reed Brodsky. 바카라No one is above the law, neither his positions, power, money or good deeds give him the right to violate the law or give him a free pass for having violated it,바카라 he said, describing Gupta and Rajaratnam as 바카라two men with public sides of success, but hidden, concealed from the public, was a different side, a side that committed crimes.바카라
If the jury had to believe what the defence had been saying, Brodsky contended, 바카라you바카라d have to believe that Gupta was the unluckiest man in the whole world바카라.