Tags: Insider Trading | Blankfein

Judge Orders Questioning of Goldman Chairman

Tuesday, 27 March 2012 02:11 PM

Goldman Sachs chairman Lloyd Blankfein must discuss his interactions with the government when he speaks with lawyers for a former board member of the investment bank who has been accused of insider trading, a judge ruled Tuesday.

U.S. District Judge Jed Rakoff ordered Blankfein to reveal his talks with government attorneys when he submits to additional questioning from lawyers for Rajat Gupta. The judge also ordered the Securities and Exchange Commission to release notes on 44 witness interviews.

Gupta is accused of helping a millionaire hedge fund owner make millions of dollars by feeding him tips on secrets he learned as a board member at Goldman and at the Procter & Gamble Co.

Government lawyers blocked Blankfein from discussing his talks with criminal prosecutors, lawyers for the Securities and Exchange Commission and at least one FBI agent when he was deposed for seven hours on Feb. 24. They said the discussions between the government and Blankfein could be kept secret because they involved the government's preparation for trial, set to begin next month.

But the judge said the government had unwittingly waived any rights it had to keep its discussions with Blankfein secret by questioning him before his deposition.

He ordered Blankfein to submit to an additional two hours of questioning.

Gupta is charged with conspiring with one-time billionaire hedge fund boss Raj Rajaratnam to break securities fraud laws through insider trading. If convicted, he faces up to 105 years in prison. He has pleaded not guilty.

Rajaratnam is serving an 11-year prison sentence after he was convicted at trial. Blankfein testified at his trial.

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Tuesday, 27 March 2012 02:11 PM
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