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Closing arguments at NYC insider trading trialClosing arguments at NYC insider trading trial of ex-Goldman Sachs board member
NEW YORK (AP) ' A former Goldman Sachs board member deliberately fed secrets about the banking giant to a close friend and hedge fund manager who used the information to make illegal multimillion-dollar trades, a prosecutor said Wednesday in closing arguments at the board member's insider trading trial.
Rajat Gupta "abused his position as a corporate insider," Assistant U.S. Attorney Richard Tarlowe told jurors in federal court in Manhattan. "Gupta violated his duty to keep that information confidential by giving that information to Raj Rajaratnam."
Tarlowe zeroed in on a Sept. 23, 2008, phone call from Gupta to Rajaratnam, a former billionaire and founder of the Galleon fund who was convicted last year of insider trading charges.
The call came only minutes after Gupta had learned during a confidential conference call about how Warren Buffett's Berkshire Hathaway planned to invest $5 billion in Goldman ' a blockbuster deal that wouldn't be announced until the stock market closed at 4 p.m.
"That news was going to be very good news for Goldman Sachs," Tarlowe said. "The average ordinary investor had no way of knowing that. ... Until the announcement, it was confidential."
Records show that moments after the two men's phone call ended at 3:55 p.m., Rajaratnam made a $40 million investment in Goldman that ended up making him nearly $1 million.
The hedge fund manager's assistant, Caryn Eisenberg, testified at trial that it was the only phone call her boss received on his private line that day between 3 p.m. and 4 p.m.
"That evidence is devastating for the defendant. ... If you believe Ms. Eisenberg, it's over ' the defendant is guilty," Tarlowe said.
Gupta, 63, has pleaded not guilty to charges of conspiracy to commit securities fraud and securities fraud. His attorneys say all his business dealings were legitimate.
The defense was to give its closing argument later in the day on Wednesday.
Rajaratnam is serving an 11-year prison sentence.
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