NEW YORK (Reuters) - Jurors in the insider-trading trial of former Goldman Sachs Group Inc board member Rajat Gupta asked for transcripts of a stock trader’s testimony and clarification of the conspiracy charge during their first day of deliberations on Thursday.
The 12-member jury in Manhattan federal court will resume discussion of the evidence from the four-week-long trial on Friday.
Prosecutors accused Gupta, 63, of making phone calls to his one-time friend and business associate, Raj Rajaratnam, to give him secret financial information between March 2007 and January 2009 while serving on the boards of Goldman Sachs and Procter & Gamble Co.
Rajaratnam, founder of the Galleon Group hedge fund, was convicted at trial a year ago and is serving an 11-year prison term.
The jury, among them a retired librarian, a nonprofit organization executive and a school counselor, is to decide on five charges of securities fraud and one charge of conspiracy. The charges carry a maximum possible prison sentence of 25 years.
“Dear Your Honor, we could use some clarification on the legal definition of conspiracy,” one jury note said in part, referring to a page in U.S. District Judge Jed Rakoff’s instructions to them earlier in the day.
Rakoff, after conferring with prosecutors and defense lawyers, replied with his own note explaining it was an agreement “entered into knowingly and willfully between any two or more persons.”
As an example of an “overt act” in the conspiracy, Rakoff wrote, “if two persons conspire to commit a fraud and one of them makes a telephone call to start the fraud going, the overt act requirement is met even if the fraud is never otherwise carried out.”
The jury also asked for transcripts of trial testimony by former Galleon trader Michael Cardillo, who pleaded guilty to criminal charges and is cooperating with prosecutors. Cardillo testified about Rajaratnam’s “guy on the board” at Procter & Gamble.
The allegation is that Galleon bought 180,000 shares of the P & G on January 29, 2009 after Gupta tipped Rajaratnam about quarterly earnings before the public announcement.
Gupta is a former head of the McKinsey & Co management consultancy and was prominent in philanthropies such as the Bill and Melinda Gates Foundation.
As he waited for the verdict, he was joined in the courtroom by his wife and four daughters who have attended the trial daily.
One other note sent out of the jury room was a request for smoking breaks by two jurors. It is the judge’s practice to have jurors escorted by court officers to walk around the building for smoking breaks, his courtroom deputy said.
Prosecutors and defense lawyers presented closing arguments on Wednesday.
Prosecutors said Gupta helped Rajaratnam make millions of dollars and stood to benefit because of his investments with Rajaratnam and position as chairman of Galleon International. They said evidence in phone logs, trading records and witness testimony corroborated the circumstances in which Gupta tipped the hedge fund manager.
Defense lawyers argued that the case was purely circumstantial and speculative. They said there was no direct evidence such as phone taps to prove what prosecutors say Gupta told Rajaratnam about company board meetings.
On the securities fraud charges, the instructions said the burden was on the prosecution to prove to the jury that “in anticipation of receiving at least some modest benefit in return” Gupta divulged confidential information “with the expectation that Mr. Rajaratnam or his associates would trade on that information.”
To convict, the jurors must find that Gupta took part in a scheme “knowingly, willfully, and with intent to defraud the company.” The conspiracy charge also has three elements of proof, including that Gupta intentionally joined it.
The case is USA v Gupta, U.S. District Court for the Southern District of New York, No. 11-907.
Editing by Martha Graybow and Bernadette Baum; editing by M.D. Golan