Audio of Rajat talking to Raj Rajaratnam

Hey,

I’ve listened to all the tapes referencing Gupta, including that one.
You are confusing the issue. This is a federal criminal investigation of INSIDER TRADING, not on whether Gupta said more than he should have, violated McKinsey rules, or whether he should have reported Anil Kumar because he referenced off-shore accounts.

First. Expert networks are WIDELY used on Wall Street and no clear line has been drawn between people who are simply outside consultants to hedge funds (legally OK ‘d by the SEC) and people who are consultants while working in the company they are discussing (grey area). Even so, the SEC has not barred that entirely. Please my blog on due process violations in the investigations of these sorts of cases. In some countries, like India, no insider trading is illegal. It’s all permissible. In the US, some forms are OK, others aren’t.
If you have read ANYTHING at all about Goldman Sachs, you will know that Blankfein (under investigation last year, not so this year) had every reason to throw Gupta to the wolves. The bad stuff at Goldman happened because of its trading culture (see Greg Smith article on Cohn and Blankfein). There were several other tippers at Goldman, leaking to Galleon. Some of the leaks sound like “channel checking” and what analysts do ordinarily. On top of that, Galleon was a major client and close associate of Goldman on several things. Goldman is now trying to distance themselves and act as if they are victims, but in fact Goldman culture is so corrupt it is highly likely that Cohn and Blankfein themselves had told the information about Buffett to someone in their hedgefund ring. Buffett’s tip ITSELF is insider dealing.
The reason Gupta is talking so casually, is because there was A CULTURE of doing that at Goldman. Besides, it’s not a federal crime NOT to report someone’s offshore fund, unless a crime is being committed. Most people don’t snitch on their business associates about taxes.
Gupta is mostly saying uh-huh to whatever Raj says..seemed a bit preoccupied. Raj is a known exaggerator and bs artist, who conned people all the time.
INSIDER TRADING normally needs quid pro quo and mens rea and breach of fiduciary duty when you’re talking about fiduciaries.
The govt has been expanding and confusing this area for years.
MOST ASTUTE WALL STREET OBSERVERS KNOW THAT GUPTA WAS A PATSY. I have been told by many that this is a truly frightening case because Rakoff has set a precedent that anyone at any time could be hauled off on quite flimsy circumstantial evidence.
The July 29 2008 call should not even have been admitted.into the evidence (I have blogged about this). It is prejudicial hearsay. In other words, it would confuse people who do not have the ability to discern between chat that does not violate the law (even the gvt doesn’t say it does) …and the unrecorded phone call on Set 23 2008. Meanwhile, Rakoff didn’t admit the ACTUAL EVIDENCE OF TIPS being given by David Loeb. Loeb, Blankfein, Cohn, and their hedge fund friends all live close together in NY and Cohn and Blankfein are very close. Read Jon Winkelried’s story of how he left Goldman at this time.
Don’t simply listen to something as a layman without a clue about what is insider trading and what is not and what is the case law, and what are the issues in the industry.
By the way, please research Rakoff (do a google search for edwallstreet and Rakoff and then for Rakoff and judicial corruption), and then research the effect of Rakoff’s ruling on the Madoff defendants and you will see he is a highly political judge. Possibly worse.