Blankfein takes stand at insider trial of Gupta

City A.M. Reporter
LLOYD Blankfein, the chief executive of Goldman Sachs Group, told jurors at the insider trading trial of one of the investment bank’s former directors that “all parts” of a 2008 board meeting the two attended were confidential.

“If something is discussed in a board meeting, it is confidential,” Blankfein said, when asked about a June 2008 board meeting in St. Petersburg, Russia, that he and defendant Rajat Gupta both attended. “All parts of it were confidential.”

Blankfein took the stand at the Manhattan federal court trial of Gupta, the second time in 14 months that the Goldman leader has been a star government witness at a major insider-trading trial.

Last year, he testified at the trial of Raj Rajaratnam, the now-imprisoned hedge fund manager whom Gupta is accused of tipping with some of Goldman’s most guarded secrets.

The June 2008 board meeting is not directly connected to any of the charges in the case, but an FBI wiretap of Rajaratnam’s phone begins with Rajaratnam telling Gupta he heard a rumour that “Goldman might look to buy a commercial bank”. Gupta’s response is that “this was a big discussion at the board meeting”.

Goldman did not acquire any bank. The two also discussed another board meeting topic; whether Goldman should consider acquiring insurance giant AIG. Rajaratnam did not trade on the speculation and Goldman did not buy AIG.