As previously discussed, one of the bigger revelations that could cause issues for Raj Rajaratnam is that his “business associate and friend,” Rajat Gupta, passed him inside information obtained from Gupta’s post as a board member of Goldman Sachs, which the Galleon founder proceeded to (allegedly!) trade on. In one particular instance, on October 23, 2008, Gupta rang up Rajaratnam twenty three seconds after an informative call with Lloyd Blankfein about the company’s financial situation. The swiftness with which Gupta funneled information to his pal presumably pleased Raj greatly, as it was a characteristic he looked for in all of his tipsters, going so far as to put it at the top of the ‘must haves’ in the listing for the gig.  So you can imagine that the hedge fund manager was not at all pleased when Rajat tried to resign from the Goldman board and dry up his well.

On September 9, 2008 Gupta apparently submitted a resignation letter to Goldman, as he hoped to take a job as a senior advisor at KKR. Luckily for Rajaratnam, Lloyd Blankfein convinced Gupta to stay on board, fearing the market’s reaction to having a director resign at that point in time. Prior to LB sitting Gupta down for a talk, though, the prospect of losing one of his best men was very real to Raj-Raj, who likely sweat bullets for weeks over the situation, including during an August 15, 2008 call, released Friday by prosecutors, in which he discusses Gupta’s potential move with Anil Kumar. At first, Raj remains calm, thinking out the why’s and the how’s of it all.

“Goldman is one board right,” Mr. Rajaratnam says on the recording. “And he’s, you know, he’s essentially an observer status, right? He’s not in there, you know, rolling up his sleeves.”

So maybe it’s this conflict of interest business, Raj thinks aloud, and Rajat is just trying to do things by the book. Or is it the fact that Rajat is a greedy jerk, who apparently doesn’t care he’s leaving Rajaratnam in the trenches, sans material, non-public information?

“But is it really that he was so greedy for the $12 million that K.K.R. has offered him?” Mr. Kumar asks on the recording.

It’s like all this selfish prick can think about is money, you know? Money and prestige.

“I think he wants to be in that circle,” Mr. Rajaratnam says. “That’s a billionaire circle, right? Goldman is like the hundreds of millions circle, right?”

He may also be obsessed with Henry Kravis.

“My analysis of the situation is he’s enamored with Kravis.”

Plus, there’s the fact that he’s really lazy. It’s not like he knows what it’s like to do an honest day of hard work. You think Rajat has any idea how exhausting it is gathering inside information to (allegedly) trade on? He doesn’t know jack.

Rajaratnam added: “And I think here he sees the opportunity to make $100 million over the next five years or 10 years without doing a lot of work.”

But this isn’t about being worried about losing a top earner at all! I hope no one’s thinking that.

Mr. Rajaratnam and Mr. Kumar also seem worried about their friend. “At some point, what I worry about is that there can be this massive implosion in him,” Mr. Kumar said. “He didn’t seem comfortable,” Mr. Rajaratnam said. “He seemed like he was tormented, right?”

Best to pass on the KKR job and keep the stress levels down. This is coming from a friend, who just wants what’s best for the Gups.

Gupta Sought To Quit Goldman In 2008 [Dealbook]

27 comments (hidden to protect delicate sensibilities)
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Comments (27)

  1. Posted by AJ Burnett | March 14, 2011 at 2:17 PM

    Making $100mm without doing any work is a pretty nice gig.

  2. Posted by Guest | March 14, 2011 at 2:20 PM

    I saw the billionaire’s club member walk on the same pavement as I did once– and he had no bodyguard except marie-jose. I can see why gupta tried to ditch the god’s charity workers.

  3. Posted by JaMarcus Russell | March 14, 2011 at 2:21 PM

    Right there with you, brutha.

  4. Posted by Guest | March 14, 2011 at 2:24 PM

    How did he sound when he said “He seemed like he was tormented, right?” Did he make that girl giggle wheezing sound afterwards?

  5. Posted by Guest | March 14, 2011 at 2:31 PM

    Nice vetting process, Goldies. Choose a guy who thinks it’s no probs to resign during a financial crisis.

    Do they have the Gupta-Blankfein conversation on tape as well?

  6. Posted by PrisonerBilly | March 14, 2011 at 2:31 PM

    More cushin for the pushin, WHERE WE GOIN!

  7. Posted by Banker_chick | March 14, 2011 at 2:39 PM

    I wish there could be a job where I could get paid to lay down on my back.

  8. Posted by JR | March 14, 2011 at 2:43 PM

    I’ll drank to dat

  9. Posted by Anderson3 | March 14, 2011 at 2:44 PM

    Raj,Gupta and Kumar set up a scam to benefit themselves and their co ethnics at the expense of the american people.

  10. Posted by Anonymous | March 14, 2011 at 2:51 PM

    “Choose a guy who thinks it’s no probs to resign during a financial crisis.”

    If that’s the most damning thing you can come up with re: Goldman’s vetting process I’d say they’re okay.

  11. Posted by Guest | March 14, 2011 at 2:54 PM

    And soon Raj will be part of the daisy chain circle. Where does that fit in the mosaic?

  12. Posted by Guest | March 14, 2011 at 2:56 PM

    Lying on your back will only last for so long. Learn to wiggle while you work.

  13. Posted by guest | March 14, 2011 at 3:35 PM

    pretty entertaining to listen to the tapes as Raj and Anil discuss who is sleeping with who… where is the dealbreaker story about that?

  14. Posted by $100MM 4 Nothing | March 14, 2011 at 3:48 PM

    But Bess, every Goldmanite can see the future actions one would take by staring intently into their eyes. At least that’s what I was told last night over a roofiecolada, and sans kidneys this morning.

  15. Posted by Guest | March 14, 2011 at 3:49 PM

    September 9, 2008, GS stock around $161. September 18th, day before the US govt announces TARP, the stock trades as low as $85.88.

    Sept 9th the Dow tanked. Sept 10th, LEH announces a $3.9billion loss and the sale of NB. Lehman filed for Chapter 11 on Sept 15th.

    Ok, you are right, smart guy to hand in his resignation letter if there was a risk the Director’s E&O insurance wasn’t going to cover any potential litigation. How much would it cost him to lawyer up for his directorship responsibilities?

  16. Posted by Anonymous | March 14, 2011 at 4:11 PM

    The Gups they lick their fingers
    And the Gups they lick their knives:
    They spill their froth on the tablecloth
    Oh, they lead disgusting lives!

  17. Posted by Guest | March 14, 2011 at 4:57 PM

    I think its really stupid that Rajataramanmanamnan has 6, potentially 10 bloomberg screens if all he is going to do is pick up a wire-tapped landline and get some insider trading tips.

  18. Posted by Guest | March 14, 2011 at 5:11 PM

    http://dealbook.nytimes.com/2011/03/11/when-raj-rajaratnam-talks-people-listen/?src=dlbksb

    i love the way he complains about charles schwab ripping him off from his 100% guaranteed $3.

  19. Posted by Guest | March 14, 2011 at 5:11 PM

    http://dealbook.nytimes.com/2011/03/11/when-raj-rajaratnam-talks-people-listen/?src=dlbksb

    i love the way he complains about charles schwab ripping him off from his 100% guaranteed $3.

  20. Posted by Guest | March 14, 2011 at 5:34 PM

    if you already read it, why do you give as shit if it’s on DB?

  21. Posted by Guest | March 14, 2011 at 6:23 PM

    Because he’s ARS.

  22. Posted by Rajat is a Racist | March 15, 2011 at 9:44 AM

    The “personal problems” and the “family problems” plaguing Rajat Gupta had to do with his older daughter, Geetanjali which happened in 2008 at the time of these calls.

    Geetanjali was expected by Rajat to get a traditional arranged marriage. Instead, she went out and got married to a Black Nigerian African.
    http://africanamedia.com/index.php/blog/entry/india_meets_africa_wedding_of_the_decade/

    As a typically racist and conservative Indian Rajat wanted his daughter to marry a nice Indian guy and give him a big dowry as is the norm in Indian culture. Instead, she gets hitched to this black dude.

    So not only is Rajat acting illegally, he’s also a bloody racist.

    From insiders I know in Connecticut, this led to a lot of friction between Rajat and his daughter.

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