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The Gupta Trial: Week 1

Friday, May 25, 2012

Rajat Kumar Gupta, former Goldman Sachs board member, leaves a Manhattan court after surrendering to federal authorities October 26, 2011. (Spencer Platt/Getty Images)

A prominent businessman, Rajat Gupta stands accused of abusing his position as a member of the board of directors of two major companies.

Prosecutors say Gupta shared confidential, material information about Goldman Sachs and Procter & Gamble with former hedge fund manager Raj Rajaratnam. Rajaratnam was convicted of insider trading last year and is serving an 11-year sentence.

Gupta's lawyers argue that the government's evidence is circumstantial and does not prove their client broke any laws. They contend that as a wealthy man with a strong reputation in the business community, he had much to lose by giving tips.

In federal court in downtown Manhattan, government lawyers have summoned a succession of witnesses to help build their case that Gupta was close friends with Rajaratnam, and broke securities laws to help him grow his family of hedge funds.

Witnesses for the prosecution have included:

Caryn Eisenberg, Mr. Rajaratnam's former assistant

Thomas Zukauskas, an FBI agent

Ananth Muniyappa, a trader at Rajaratnam's Galleon Group

Byron Trott, a former vice chairman at Goldman Sachs

Carolann Shields, official with McKinsey & Company, where Gupta was managing partner

Bill George, Harvard Business School professor

Mark Belgya, chief financial officer of J.M. Smucker Co.

Jurors also heard a 24-minute conversation between Gupta and Rajaratnam, which was secretly wiretapped by the FBI. View the transcript below.

Click for a full-screen view.

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