Judge: Goldman Sachs chairman can be deposed in NY

AP News
Posted: Nov 30, 2011 1:37 PM
Judge: Goldman Sachs chairman can be deposed in NY

Goldman Sachs chairman Lloyd Blankfein can be deposed in a civil case even before the April criminal trial of a former Goldman Sachs board member accused of insider trading, a judge has ruled.

U.S. District Judge Jed Rakoff signed an order Tuesday that requires Blankfein and six others to answer questions related to the civil case brought against former board member Rajat Gupta.

Gupta faces an April criminal trial on charges that he conspired with 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.

Rakoff said in his written order that he saw no reason to delay the depositions of Blankfein and others because the government has indicated it is unlikely to call them as witnesses at the criminal trial.

Rajaratnam is scheduled to report to prison Monday. Blankfein was called to testify at his trial that a phone call Gupta made to Rajaratnam after a board meeting violated the investment bank's confidentiality policies.

At Rajaratnam's trial, jurors heard testimony that at an Oct. 23, 2008, Goldman board meeting, members were told that the investment bank was facing a quarterly loss for the first time since it had gone public in 1999.

Prosecutors produced phone records showing Gupta called Rajaratnam 23 seconds after the meeting ended, causing Rajaratnam to sell his entire position in Goldman the next morning and save millions of dollars.

Rajaratnam also earned close to $1 million when Gupta told him that Goldman had received an offer from Warren Buffett's Berkshire Hathaway to invest $5 billion in the banking giant, prosecutors said.