The defence team of Goldman Sachs Group‚Äôs Indian American director Rajat Gupta, accused of insider trading, is seeking material to show ‚Äúanimosity‚ÄĚ between Gupta and convicted hedge fund billionaire Raj Rajaratnam.
Gupta‚Äôs poor relationship with Rajaratnam, the Galleon Group co-founder convicted of profiting from his tips, would be a ‚Äúkey defence theme‚ÄĚ, one of Gupta‚Äôs lawyers said.
In a letter to US District Judge Jed Rakoff Thursday, lawyer David Frankel said an unnamed ‚Äúkey government witness‚ÄĚ discussed the ‚Äúanimosity between the two men‚ÄĚ in a July 2010 interview with investigators from the Securities and Exchange Commission and Federal Bureau of Investigation.
In a hearing in January before Rakoff, who will preside over Gupta‚Äôs criminal trial in May, prosecutors said Claes Dahlback, a Goldman Sachs director who is a former chief executive officer of Sweden‚Äôs Investor AB, spoke to Gupta after Rajaratnam‚Äôs October 2009 arrest.
‚ÄúDahlback asked Gupta if Gupta knew Rajaratnam,‚ÄĚ Rakoff said, quoting a memo summarising Dahlback‚Äôs June interview with the government.
‚ÄúGupta responded that ‚ÄėRajaratnam was a bad man‚Äô. Gupta further stated Gupta lost money with Rajaratnam,‚ÄĚ Rakoff said, summarising the witness report.
Prosecutors said in January that Gupta was motivated to pass tips to Rajaratnam by friendship and by investments he held with the hedge-fund manager.
Defence lawyers may try to counter the government‚Äôs case by showing friction between the two men.
In November, Rakoff ruled that Lloyd Blankfein, Goldman Sachs‚Äôs CEO, could be questioned before Gupta‚Äôs criminal trial begins. Rakoff said depositions of other Goldman Sachs officers must be conducted after the trial.
In his deposition in the SEC case, Blankfein said that representatives of the US Attorney‚Äôs Office, the SEC and FBI had prepared him, in two sessions, for his testimony.
Reed Brodsky, one of the federal prosecutors in Gupta‚Äôs criminal case, asked three-fourths of the questions in the sessions, Frankel said.
Gupta‚Äôs lawyers have asked Rakoff to allow them to conduct additional questioning of Blankfein and production of the documents shown to him by prosecutors.
In a separate court filing, the SEC said that Gupta‚Äôs lawyers shouldn‚Äôt be allowed to conduct additional questioning of Blankfein.