New York: Rajat Gupta, a former Indian American Goldman Sachs director, told hedge fund tycoon Raj Rajaratnam the investment bank was considering buying a commercial bank, according to a wiretapped telephone conversation played in court.
Rajat Gupta (pictured), a former Indian American Goldman Sachs director, told hedge fund tycoon Raj Rajaratnam that Goldman was weighing an acquisition of either Wachovia or American International Group (AIG).
Rajaratnam, working from his Greenwich, Connecticut, home that day, told Gupta that he was meeting with Gary D. Cohn, the president of Goldman, later in the week. He asked Gupta about a rumour that Goldman might look to buy a commercial
"This was a big discussion at a board meeting," Gupta said on the taped call. "And, you know, it was, uh, a divided discussion in the board."
Goldman was bearish on commercial banks, he said, but the board was "opportunistic" and if Wachovia "was a good deal they'd go and buy Wachovia."
Gupta also said that the board was weighing the acquisition of an insurance business, including AIG. "Yes, AIG was in the discussion mix," he said. Ultimately, Gupta concluded, "I would be extremely surprised" if there was "anything imminent."
The detailed discussion of Goldman's board meeting is the first time the government has disclosed specific comments made by Gupta to Rajaratnam about the bank's internal dealings.
Raj Rajaratnam (pictured) and Gupta are also heard discussing former Indian American McKinsey and Co. partner Anil Kumar, prosecution's star witness in the biggest US insider-dealing trial in decades.
"He is constantly ... scheming is not the right word, but constantly trying to figure what other people's angles are," Rajaratnam said to Gupta. Another point Rajaratnam says of Kumar, "I'm getting a feeling that he's trying to ... you know, be a mini Rajat, right?"
He goes on to say: "And I, you know, honestly, Rajat, I'm giving him a million dollars a year for doing literally nothing." Earlier this month, the Securities and Exchange Commission alleged in a civil case that Gupta had passed along inside information about Goldman to Rajaratnam.
An attorney for Gupta, who left Goldman's board in May, has said he hasn't been accused of trading on stock tips, or being compensated for the information he allegedly gave Rajaratnam.
Rajaratnam's lawyers grill star Indian American witness
Lawyers of hedge fund tycoon Raj Rajaratnam sought to discredit prosecution's star witness Indian American Anil Kumar calling him a money launderer and tax dodger who cut a plea deal to avoid criminal charges.
Kumar, 52, former McKinsey & Co. partner, has testified in the biggest US insider-dealing trial in decades about giving Rajaratnam inside information regarding his consulting clients in exchange for more than $2 million in offshore payments.
A sign shows the address of the Goldman Sachs headquarters building in New York. REUTERS
"You weren't charged with money laundering, right?" Dowd, asked Kumar. "You understand they could have charged you?" "Yes."
Highlighting Kumar's failure to report the fees on his tax returns, Dowd said: "In fact they were fraudulent." "Is that a question?" countered Kumar.
"It's important to testify to make Mr Streeter happy, correct?" Dowd said, referring to the prosecutor. Kumar, who has pleaded guilty to conspiracy and securities fraud, responded that he was testifying to "uphold the law".
Rajaratnam, 53, is facing 14 counts of conspiracy and securities fraud. He is among 26 people charged in a criminal insider-trading probe, 19 of whom have pleaded guilty.
Earlier in the day, Kumar testified that Rajaratnam had suspected federal agents were on his trail in the weeks leading up to his 2009 arrest, but had continued to pass along inside information to his associates.
Anil Kumar, a former McKinsey and Co director accused of leaking information in the Galleon hedge fund insider trading case, leaves the U.S. Federal Court in Manhattan. REUTERS
"We were in deck chairs on the beach," Kumar testified when Rajaratnam told him he was "really disappointed" because "there's another gentleman who used to work for me who I'm told is now wearing a wire."
Then Rajaratnam cautioned him only to call using prepaid, disposable phones.
"You should be careful," he said, according to Kumar.
Asked by federal prosecutor Jonathan Streeter who wore the wire, Kumar said it was money manager Ali Far, a former Galleon employee. Far has also pleaded guilty to criminal charges.
Source: IANS