Blankfein to testify at Gupta trial

Prosecutors are planning to call Lloyd Blankfein, chief executive of Goldman Sachs, to testify next week at the insider trading trial of Rajat Gupta, a former director of the bank, as the government moves closer to wrapping up its case.

Mr Blankfein is one of nine remaining witnesses for the prosecution. He testified in the government’s insider trading case against Raj Rajaratnam, the founder of Galleon Group, to whom Mr Gupta is alleged to have provided secret Goldman information.

A lawyer for Mr Gupta said he planned to call more than 15 witnesses when the defence presents its case next week. Of these, roughly 10 are character witnesses, including members of the Bill and Melinda Gates Foundation and World Bank.

Gary Naftalis, Mr Gupta’s attorney, declined to say whether Mr Gupta would testify. He has denied any wrongdoing.

Earlier on Thursday, Ayad Alhadi, a former fundraiser for Galleon, testified that in March and April 2008 he and Mr Gupta met with several potential large investors in the Middle East, including the Abu Dhabi Investment Council and the Saudi Arabia-based National Commercial Bank.

Just before leaving for the trip, he said, Mr Gupta was named chairman of Galleon International, a fund that invested in stocks in Asia. The head of asset management investing at National Commercial’s investment arm followed up with a trip to Galleon’s offices in New York in late April.

Gupta trial: the key players

Mr Alhadi testified National Commercial was more “comfortable investing with Galleon knowing Mr Gupta had some affiliation”. That same month Mr Gupta also met with Abu Dhabi Investment representatives in New York.

On May 1, Abu Dhabi Investment said it would invest $50m. National Commercial’s investment arm said it would invest $25m to $30m.

When asked by prosecutor Reed Brodsky whether it was common to receive an investment days after a meeting, Mr Alhadi said “that’s pretty uncommon”.

Prosecutors are trying to convince the jury that Mr Gupta was a close business associate of Mr Rajaratnam and allegedly fed him confidential company information to benefit that relationship.

Lawyers for Mr Gupta contend the two men’s relationship had frayed by September 2008, a time when Mr Gupta is alleged to have passed inside information to Mr Rajaratnam.

His lawyers used some of the same emails that showed meetings with Middle East investment funds to highlight Mr Gupta’s position on boards of the Gates Foundation, Harvard University and the World Economic Forum.