The insider-trading trial of Westporter Rajat Gupta, a former Goldman Sachs director, began in New York today with a U.S. prosecutor saying he “threw away his duties” by divulging bank secrets to hedge fund manager Raj Rajaratnam. 
Rajat Gupta: prosecutor says he “threw away his duties.” File photo
With Gupta’s wife Anita and their four adult daughters watching from a front row, the defense countered that the government had no direct evidence.
Gupta, 63, a native of India who lives with his family in Westport’s Greens Farms area, is the most prominent corporate executive charged in a U.S. government crackdown on insider trading in recent years.
Galleon Group founder Rajaratnam, a business associate of Gupta, was convicted of insider trading a year ago and is serving an 11-year prison term.
Assistant U.S. Attorney Reed Brodsky told the jury that Gupta broke the law when, immediately after a Goldman Sachs board meeting on Sept. 23, 2008, he informed Rajaratnam that Warren Buffett’s Berkshire Hathaway Inc. would invest $5 billion in the firm. Rajaratnam traded on the tip, Brodsky said.
“Gupta threw away his duties, he threw away his responsibilities, and he broke the law at the time the company was in crisis,” Brodsky said in his opening statement. “He used those secrets to help his friend and Raj Rajaratnam sold his Goldman stock and made nearly a million dollars from Gupta’s tip.”
Gupta’s lawyer Gary Naftalis painted a very different picture of Gupta. He repeatedly told the jury that there was “no real, hard, direct evidence” against him despite 10 months of FBI wiretaps on Rajaratnam’s phones in 2008 and 2009.
“Rajaratnam had sources all over town giving him information. He even had sources at Goldman Sachs,” Naftalis told the 12-member jury, which includes a nurse, an elementary teacher, and two executives.
The trial is expected to last three to four weeks. The government will call its first witnesses on Tuesday.
