Here's some news that should be comforting not only to former Goldman Sachs board member Rajat Gupta, but anyone who has in the past or is considering in the future leaking non-public details about a company to a hedge fund manager who'll proceed to trade on them-- should you be caught on tape doing just that, criminal charges are unlikely.
Prosecutors in the trial of Rajaratnam this week played a tape of the call in which the former Goldman Sachs board member chatted casually with the hedge fund manager about the bank’s talks on buying Wachovia or AIG...The exchange, along with additional government allegations divulged in recent weeks, isn’t a smoking gun that shows Gupta meant to break the law, said Tom Dewey, a lawyer at New York’s Dewey Pegno & Kramarsky LLP. Richard Scheff, who practices criminal law and isn’t involved in the case, called the prospect of charges “unlikely.”
Early in the trial, prosecutors displayed a photograph of Gupta on a video screen while Assistant U.S. Attorney Jonathan Streeter told jurors he was a “co-conspirator” who leaked tips about Goldman Sachs’ earnings and a 2008 investment in the bank by Warren Buffett’s Berkshire Hathaway Inc. Within minutes of attending two board meetings, Gupta, 62, called Rajaratnam, 53, who traded on the tips, Streeter said. Prosecutors on March 15 played a wiretap recording of the July 29, 2008, telephone call between Gupta and Rajaratnam. In it, Rajaratnam asked about a “rumor that Goldman may look to buy a commercial bank.” In response, Gupta said, “Yeah, this is being discussed” and that the board was “divided” on suggestions that it purchase Wachovia...Streeter said the government also has an October 2008 wiretap recording of Rajaratnam in which the fund manager tells “employees” that “he was told by a Goldman Sachs board member that the investment bank was losing $2 a share,” Streeter said.
So the key takeaway here seems to be that if you act natural, if you keep things "casual," like you're just calling to say hey, shoot the breeze, mention some stuff that's been going on at work and see what's on tap for the weekend, you should be okay.
Earlier: Goldman Sachs Board Member Couldn’t Wait A Single Second To Pass Insider Information To Raj Rajaratnam