Goldman CEO Said To Have Agreed To Testify In Insider Case

The Wall Street Journal reports that Goldman Sachs CEO Lloyd Blankfein is understood to have agreed with US prosecutors that he will testify, if required, in the forthcoming high-profile insider trading trial of Galleon hedge fund founder Raj Rajaratnam.

Goldman and Blankfein have been drawn into the case after the SEC charged former firm board member Rajat Gupta of leaking earnings and other non-public information, which he obtained from Blankfein in the ordinary course of business, to Rajaratnam in 2008, which was then allegedly acted on by the hedge fund manager to make illicit profits for his firm.

The newspaper says that Blankfein's testimony would be 'used as a bridge establishing the origin of the tip(s) allegedly provided  by Mr Gupta to Mr Rajaratnam'.

There is no suggestion that either Goldman or Blankfein did anything wrong.

The Journal has also reported that Rajaratnam's lawyers are suggesting that the SEC's action in charging Gupta just one week ahead of his trial could have violated their client's constitutional rights.

In court documents filed Thursday, the hedge fund manager's lawyer, Tom Dowd, said: 'The overwhelming publicity from this action (the Gupta charges) has seriously jeopardized Mr Rajaratnam's ability to seat an impartial and unbiased jury'.

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