Not Rajat Gupta, Raj leak from 'elsewhere'

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SummaryRajat Gupta presented phone to show Rajaratnaman had leaked inside information to him.

Lawyers for Indian-origin former Goldman Sachs director Rajat Gupta presented phone records before the jury at his trial here to show that convicted hedge fund founder Raj Rajaratnaman had links with another executive in the banking firm who leaked inside information to him.

Attorney David Frankel questioned Joseph Yanagisawa, an employee in Goldman Sachs's technology unit, about phone calls between the global banking giant's head of Asia Equity Sales David Loeb and Rajaratnam.

Some of these phone calls were made on the same day in September and October 2008 when prosecutors allege Gupta called the Galleon co-founder to pass confidential information about market-moving events at Goldman.

Gupta, 63, a onetime global head of McKinsey & Co management consultancy, is charged with securities fraud and conspiracy in U.S. District Court in New York over allegations he leaked boardroom secrets to Rajaratnam and his Galleon Group between March 2007 and January 2009.

Yanagisawa took the witness stand yesterday testifying for the government about numerous call records between Gupta's phone and Rajaratnam's phone in 2007 and 2008.

On cross-examination, Frankel presented records of Loeb making repeated calls in 2007 and 2008 to Rajaratnam's business and cellphone lines and to numbers associated with Adam Smith, a former Galleon trader who has pleaded guilty to insider trading and is cooperating with prosecutors.

"That was Loeb calling?" Frankel asked of a record of one call to Rajaratnam's direct line. "Yes," Yanagisawa replied.

Loeb made two calls to Smith's number on the afternoon of September 23, 2008, including one at 3:07 pm. Prosecutors say Gupta tipped Rajaratnam at around 3:55 pm that day about news that Warren Buffet's Berkshire Hathaway was investing five billion dollars in Goldman.

Other records showed that Loeb made four calls to numbers tied to Smith and Rajaratnam on October 23, 2008, the same day that prosecutors say Gupta informed Rajaratnam that Goldman Sachs would lose almost two dollars a share, worse than Wall Street expectations.

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