The jury weighing insider-trading charges against former Goldman Sachs Group Inc. director Rajat Gupta finished its first day of deliberations yesterday in Manhattan federal court without reaching a verdict.
Deliberations are scheduled to resume today.
Gupta, 63, who ran McKinsey & Co. from 1994 to 2003, is accused of leaking secret tips to Galleon Group LLC co-founder Raj Rajaratnam about New York-based Goldman Sachs and Cincinnati-based Procter & Gamble Co. Gupta left the Goldman Sachs board in 2010 and the P&G board last year.
He’s charged with conspiracy and five counts of securities fraud. The most serious count against him carries a maximum prison sentence of 20 years. At Rajaratnam’s trial last year, which ended with the hedge-fund manager being convicted of insider trading, jurors deliberated for 12 days.
Alleged tips by Gupta included information on a $5 billion investment by Warren Buffett’s Berkshire Hathaway Inc. in Goldman Sachs on Sept. 23, 2008, and on Goldman Sachs losses in the fourth quarter of 2008. Prosecutors also said Gupta told Rajaratnam that P&G planned to sell its Folgers Coffee unit to J.M. Smucker Co.
Jurors selected as their foreman a Westchester County, New York, man who works at a not-for-profit organization. After deliberating for several hours yesterday, they asked to review the testimony of Michael Cardillo, a former Galleon trader who has pleaded guilty to insider trading and cooperated with prosecutors. Cardillo testified that Rajaratnam’s brother told him that Rajaratnam had “a guy” on P&G’s board.
The jury also asked that the judge clarify the law on conspiracy, particularly the requirement that there be “an agreement to commit securities fraud between at least two” people, according to U.S. District Judge Jed Rakoff, who read their note aloud in court.
The case is U.S. v. Gupta, 11-cr-00907, U.S. District Court, Southern District of New York (Manhattan).