Why is Goldman sachs paying legal fee for Rajat Gupta and defending a employee without integrity? Is everything part of a bigger game?
Goldman paid bulk of Rajat Gupta's legal fees: NYT
Goldman Sachs (GS.N) has paid for the bulk of former board member Rajat Gupta's legal defense in an insider trading case that ended in his conviction
Gupta, a consummate business insider who also sat on the board of Procter & Gamble (PG.N), was convicted on Friday of leaking secrets about Goldman at the height of the financial crisis, a major victory for prosecutors seeking to root out illicit trading on Wall Street.
Procter & Gamble also paid some of the $30 million in legal fees, the paper reported.
Under a deal reached before the trial, Gupta agreed to reimburse Goldman for the legal costs if he were convicted, the New York Times said.
However, the investment bank must continue to pay the bills until Gupta's appeal, which may take a couple of years, the paper reported.
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Rajat Gupta faces more than 20 years in jail for leaking secrets to Raj Rajaratnam.
In one incident Gupta called Rajaratnam a minute after taking part in a conference call with his Goldman Sachs colleagues at which the bank's boss, Lloyd Blankfein, announced billionaire investor Warren Buffett planned to invest $5bn in it. Galleon, Rajaratnam's hedge fund, bought $43m of Goldman stock in the final three minutes of the trading day and made nearly $1m on the trade. Blankfein was called to testify in the case.
Gupta was also accused of leaking information about Procter & Gamble, where he was also a director.
Photograph: Lucas Jackson/Reuters
The prosecution never accused Gupta of personally trading on inside information but argued he benefited from his stake in Voyager, an investment firm he set up with Rajaratnam which invested in Galleon funds. The defense argued that there was no evidence that Gupta profited, or traded on, any alleged tip and said Gupta had considered suing Rajaratnam over Voyager, which failed.
Rajaratnam was caught on dozens of wiretaps discussing inside information and trades he had made, but the evidence against Gupta was far less compelling. The prosecution offered only one substantive conversation between the two men, and Rajaratnam did not trade on the information prosecutors alleged was shared.
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Senators Slam Goldman, Accuse Firm of 'Unethical' Bet Against Housing Market
Defending his company under blistering criticism, the CEO of Goldman Sachs testily told skeptical U.S. senators Tuesday that customers who bought securities from the Wall Street giant in the run-up to a national financial crisis came looking for risk "and that's what they got."
Lloyd Blankfein and other Goldman executives were lambasted by lawmakers for "unbridled greed" in an often-electric daylong showdown between Wall Street and Congress -- with expletives frequently undeleted. Unrepentant, five present and two past Goldman officials unflinchingly stood by their conduct before a Senate investigatory panel and denied helping to cause the financial near-meltdown that turned into the worst recession since theGreat Depression.
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