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Rajat Gupta threw away his duties, abused post: Prosecution

As trial begins in the insider trading case, the defence argues that Rajat Gupta was not an insider trader and does not belong in the courtroom. FULL COVERAGE

twitter-logo PTI   New York     Last Updated: May 22, 2012  | 10:32 IST

Former Goldman Sachs director Rajat Gupta "threw away his duties" when he passed confidential company information to hedge fund founder Raj Rajaratnam, a prosecutor told a US court, even as defence argued that the Indian American was not an insider trader and "does not belong in this courtroom".
 
FULL COVERAGE:Rajat Gupta trial

The trial of Gupta , one of the most high profile Wall Street executives to be charged with insider trading, began in US District Court, Southern District of New York on Monday amid intense media glare.
 
In his opening remarks to the 12 member jury, Assistant US Attorney Reed Brodsky said Gupta "threw away his duties and responsibilities and broke the law," by sharing insider tips with Rajaratnam, who is currently serving an 11 year prison sentence on insider trading charges.
 
The case of illegal insider trading "is about this man," Brodsky said facing the jury and pointing his hand toward Gupta "and how he violated his duties and abused his position as a corporate insider".
 
Gupta flanked by his defence team sat stoically, staring at Brodsky as he accused him of cheating shareholders and "periodically" passing secret information to Rajaratnam.
 
Gupta's family and a handful of his friends were present in court for day one of the trial, which is expected to last three weeks and could end before June 15.
 
Gupta's wife Anita sat right behind him in the first bench in the courtroom, surrounded by their four young daughters, who throughout the hearing exchanged glances and occasionally put their arms around their mother in support.
 
As one of the daughters turned emotional during the prosecution's opening remarks, her mother put her hand around her shoulder and sought to comfort her.
 
These instances included the five billion dollars investment from Warren Buffett's Berkshire Hathaway in Goldman, Goldman's quarterly profits and losses and Proctor and Gamble's 2008 sale of Folgers Coffee Co to JM Smucker.
 
Brodsky said Rajaratnam implemented immediately on the information he received from Gupta making millions of dollars in profits in minutes and similarly avoiding huge losses by his advance knowledge of company stock situation.
 
Brodsky also detailed a July 29, 2008 call between the two "close friends" in which Rajaratnam asked Gupta about a "rumour" that Goldman is looking to buy a commercial bank.
 
Brodsky said the call provided "a clear window into how these two men spoke to each other and helped each other out".
 
The jury will hear from corporate witnesses, see telephone and email records and hear telephone conversations in which Rajaratnam is telling traders he had heard from "somebody on the board of Goldman Sachs" about the firm's key financial information," Brodsky said, adding that Gupta committed a "serious crime which we will prove to you beyond a reasonable doubt".

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