| NEW YORK, April 30
NEW YORK, April 30 U.S. prosecutors want the
jury in May's insider trading trial of former Goldman Sachs
director Rajat Gupta to hear three secretly-recorded
phone conversations of Galleon Group hedge fund founder Raj
Rajaratnam as evidence of the purported conspiracy between
In a pre-trial filing in Manhattan federal court on Monday
night, the government said two of Rajaratnam's conversations
with his principal trader and another with Galleon's then
portfolio manager showed Gupta leaked Goldman board secrets at
the height of the financial crisis in 2008. The calls were
recorded by the Federal Bureau of Investigation.
"Rajaratnam's statements in these three recorded
conversations are essential evidence of the insider trading
charges against Gupta in this case," prosecutors Reed Brodsky
and Richard Tarlowe wrote to U.S. District Judge Jed Rakoff.
The government said Gupta had passed the Goldman information
to Rajaratnam in earlier phone calls that were not part of the
FBI's wiretap surveillance of Rajaratnam, who is serving an
11-year prison term, the longest handed down for insider
trading, after his conviction at trial a year ago.
A spokeswoman for Gupta's lawyer, Gary Naftalis, declined to
comment on the government's motion. Defense lawyers have until
May 11 to respond. The trial is scheduled to start on May 21.
Gupta, also a former global head of McKinsey & Co, is the
highest-ranking corporate executive to be charged in a broad
U.S. crackdown on insider trading at hedge funds in recent
years. Dozens of people have pleaded guilty or been convicted at
Gupta is accused of providing inside tips about Goldman and
Procter & Gamble board meetings to Rajaratnam in 2007 and
2008. Rajaratnam was recorded by the FBI discussing the Goldman
information with trader Ian Horowitz and portfolio manager David
The indictment said Gupta gave Rajaratnam advance knowledge
of a $5 billion investment in Goldman by Warren Buffett's
Berkshire Hathaway Inc at the height of the
2008 financial crisis, Goldman's surprise fourth-quarter 2008
loss, and P&G's quarterly earnings in late January 2009.
Monday's government motion argued that since there were no
recordings of phone conversations between Gupta and Rajaratnam
on Sept. 23 and on Oct. 23, 2008 and no other participants,
"Rajaratnam's statements in the subsequent wiretapped calls with
Horowitz and Lau provide indispensable evidence" that Gupta
tipped Rajaratnam and that Rajaratnam purchased and sold Goldman
stock on Sept. 23 and Oct. 24 on the basis of those tips by
The former Goldman and Procter & Gamble director has denied
the charges, which include five counts of securities fraud and
one count of conspiracy. Gupta says he lost money investing with
Rajaratnam and that as many as four other Goldman personnel
could have been tipping Galleon. Gupta could face up to 25 years
in prison if convicted of securities fraud.
Horowitz has been described in the case as an unindicted
co-conspirator. A lawyer for Horowitz could not be reached to
The case is USA v Gupta, U.S. District Court for the
Southern District of New York, No. 11-907.