Goldman CEO can testify in insider case: judge

NEW YORK Wed Nov 30, 2011 6:15pm EST

Goldman Sachs Chairman and CEO Lloyd Blankfein testifies before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on ''Wall Street and the Financial Crisis: The Role of Investment Banks'' on Capitol Hill in Washington April 27, 2010.     REUTERS/Jason Reed

Goldman Sachs Chairman and CEO Lloyd Blankfein testifies before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on ''Wall Street and the Financial Crisis: The Role of Investment Banks'' on Capitol Hill in Washington April 27, 2010.

Credit: Reuters/Jason Reed

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NEW YORK (Reuters) - Goldman Sachs Group Inc Chief Executive Officer Lloyd Blankfein may be asked to testify in a market regulator's insider-trading case against a former director of the Wall Street bank, a judge ruled.

The U.S. Securities and Exchange Commission has accused Rajat Gupta, a former board member at Goldman and Procter & Gamble, of giving inside tips about the two companies to his friend Raj Rajaratnam in 2008 and 2009.

Rajaratnam, founder of the Galleon Group hedge fund, was convicted of 11 criminal counts in May. Blankfein testified for the prosecution at that trial.

Gupta denies the charges in the SEC's civil lawsuit. He also is contesting criminal insider-trading charges brought by the U.S. Attorney's Office in Manhattan.

U.S. District Judge Jed Rakoff identified Blankfein and six others, including some former Galleon traders, as people who could be interviewed under oath in the SEC case. The written order was dated Tuesday.

Goldman Sachs spokesman David Wells declined to comment.

Gupta's lawyer, Gary Naftalis, had told the judge he wanted to depose Blankfein and other Goldman executives.

The judge has scheduled start dates of April 9 for Gupta's criminal trial and October 1 for the civil trial. Rajaratnam is also a defendant in the SEC case against Gupta.

Typically, when there are parallel cases by the SEC and the Department of Justice, the regulator's case is suspended until the end of the criminal trial.

However, Rakoff's order said there was "sufficient time after the completion of the criminal case to complete all discovery while at the same time assuring that the parallel civil case will go forward to trial promptly."

The cases are SEC v Gupta and Rajaratnam, U.S. District Court for the Southern District of New York, No. 11-07566, and USA v Rajat Gupta, No. 11-907, in the same court.

(Reporting by Grant McCool; Editing by Lisa Von Ahn)

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Comments (2)
Midnight1 wrote:
Some one sharpen the Guillotine!

Nov 30, 2011 2:28pm EST  --  Report as abuse
Midnight1 wrote:
Way to go again Judge Rakoff! Keep occupying justice! Cheers!!!!!

Nov 30, 2011 2:30pm EST  --  Report as abuse
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