It’s flip-flop weather outside these days, and apparently in the courtroom as well.
Former director of Procter & Gamble Co. (P&G) and Goldman Sachs Group Inc. Rajat Gupta, who is on trial over insider-trading charges, decided yesterday that he will not take the stand in his own defense. Just two days earlier, Gupta’s lawyer announced that it was “highly likely” that he would testify.
"After substantial reflection and consideration, we have determined that Mr. Gupta will not be a witness on his own behalf in the defense case," Gary Naftalis, Gupta's main counsel, wrote in a letter to U.S. District Judge Jed Rakoff yesterday.
Gupta is the centerpiece of the U.S. government’s recent efforts to curb insider trading, and is accused of passing tips to former hedge fund manager Raj Rajaratnam, the former head of Galleon Group, who currently is serving an 11-year prison term for conspiracy and securities fraud.
The prosecutors rested their case on Friday, concluding two weeks of witnesses, including Goldman CEO Lloyd Blankfein, who testified about the confidentiality of the bank’s board meetings, and evidence such as court-approved wiretaps of Rajaratnam's phones that featured conversations with Gupta.
Jurors also heard testimony from Rajaratnam’s former assistant Caryn Eisenberg, who said that Rajaratnam received a call about Goldman just before Berkshire Hathaway invested $5 billion in the bank. Although Eisenberg recognized the caller’s voice, she could not definitively recognize him as Gupta.
Gupta argued that senior Goldman salesman David Loeb was the one who passed the illegal information to Rajaratnam. Loeb, who has not been charged, tipped Rajaratnam about Intel Corp., Apple Inc. and Hewlett-Packard Co., according to Gupta’s camp.
Now, it’s the defense’s turn to argue its case.
It’s somewhat uncommon for high-profile, white-collar defendants to testify in these types of cases, Reuters reports, noting that WorldCom's Bernie Ebbers, Tyco's Dennis Kozlowski and Enron's Jeffrey Skilling all took the stand at their trials, and were all convicted.
Arrested last October, Gupta has pleaded not guilty and asserts that the government’s evidence is circumstantial.
For more from InsideCounsel on Gupta’s trial and tribulations, read: