NEW YORK, June 10 (Reuters) - Former Goldman Sachs Group Inc
board member Rajat Gupta, on trial over insider trading charges,
has decided not to take the risk of testifying in his own
defense, two days after his lawyer said it was "highly likely"
he would take the stand.
"After substantial reflection and consideration, we have
determined that Mr Gupta will not be a witness on his own behalf
in the defense case," Gupta's main lawyer, Gary Naftalis, wrote
in a letter to U.S. District Judge Jed Rakoff on Sunday.
Gupta, 63, is contesting charges that he illegally divulged
financial information to his one-time friend and business
associate, Galleon Group founder Raj Rajaratnam, between March
2007 and January 2009 while serving on the boards of Goldman and
Procter & Gamble Co.
The trial in U.S. District Court in New York began on May 21
and prosecutors rested their case on Friday, concluding two
weeks of witnesses and evidence such as court-approved wiretaps
of Rajaratnam's phones that included conversations with Gupta.
A key government witness was Goldman Sachs Chief Executive
Officer Lloyd Blankfein, who testified about the confidentiality
of the investment bank's board meetings and discussions.
As the defense began its leg of the case, Naftalis told the
judge after the jury had gone home for the weekend that "it is
highly likely my client will testify."
It is relatively rare, but not unusual, for high-profile
white collar defendants to tell the jury their version of
Chief executives such as WorldCom's Bernie Ebbers, Tyco's
Dennis Kozlowski and Enron's Jeffrey Skilling, each took the
stand at their trials. They were all convicted.
Gupta, through his lawyers, has argued that the government
has a circumstantial and speculative case. Gupta and Rajaratnam
had a falling out in 2008 and Gupta lost all of a $10 million
investment with Rajaratnam, according to the defense.
In order to convict Gupta of the charges of securities fraud
and conspiracy in insider trading, the jury must be convinced
beyond a reasonable doubt that he breached his fiduciary duties
and would gain some benefit from tipping off Rajaratnam.
Testimony by Gupta would have enlivened a trial that has
been prolonged by numerous documents being presented to the jury
and frequent conferences between the judge and lawyers out of
hearing of 12 jurors and two alternates. They include a nurse, a
school counselor and executive of a non-profit organization.
The trial resumes on Monday with the defense expected to
continue presenting character witnesses on behalf of Gupta, who
rose from humble beginnings in India to the upper echelons of
the global corporate and philanthropic worlds. He headed elite
business management consultancy McKinsey & Co for nine years and
also served as an advisor to the Bill and Melinda Gates
Now that Gupta has decided not take the witness stand, the
jury could hear closing arguments on Tuesday or Wednesday.
Rajaratnam, who was convicted a year ago of insider trading
charges and is serving an 11-year prison term, also opted not to
testify in his own defense.
The case is USA v. Gupta, U.S. District Court for the
Southern District of New York, No. 11-907.
For USA: Reed Brodsky of the U.S. Attorney's Office.
For Gupta: Alan Friedman of Kramer Levin Naftalis & Frankel.
(Reporting by Grant McCool)
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