New York: Rajat Gupta, former director of Goldman Sachs Group, had a "not long, but good" tenure, the bank's CEO Lloyd Blankfein testified at his trial on insider trading charges.
Cross-examined by Gupta's lawyers, Blankfein, 57, testified in Manhattan federal court Thursday that when Gupta, a top Indian American business honcho, considered leaving the bank's board in 2008 to join KKR, the buyout firm co-founded by Henry Kravis and George Roberts, his exit was on the "best of terms".
Goldman gave Gupta cufflinks. Gupta stayed on the board at the urging of Blankfein, he said, out of concern that his exit during the financial crisis could raise questions about the inner workings of Goldman.
Asked whether Gupta's tenure was long and good, Blankfein said: "It wasn't long but it was good."
Blankfein also testified that Gupta's relationship with convicted hedge fund billionaire Rajaratnam did not cause him any concern in 2008.
Prosecutors have alleged that Gupta tipped Rajaratnam, founder of the Galleon Group hedge fund, that Goldman was losing USD 2 per share in October 2008, when analysts were anticipating the bank to turn a profit.
Profit and loss statements from October 17 that were presented to the Goldman board showed the bank was losing USD 1.96 per share so far that quarter.
Earlier on Thursday, prosecutors showed phone and trading records indicating Galleon made USD 13.5 million in profits and avoided USD 3.8 million in losses on the basis of the alleged tips from Gupta.
Blankfein testified that board discussions were confidential as company policy and "sensibly so because the information was very important and potentially market moving to our stock."
Blankfein said he never authorised Gupta to discuss earnings information with anyone outside of the board.
First Published: Friday, June 8, 2012, 09:20