Goldman director in focus on Berkshire deal: report

(BestGrowthStock) – Goldman Sachs (GS.N: ) director Rajat Gupta told hedge fund billionaire Raj Rajaratnam about a $5 billion investment in Goldman by Berkshire Hathaway (BRKa.N: )(BRKb.N: ) before the deal was made public, the Wall Street Journal said, citing a person close to the situation.

In late September 2008, at the height of the credit crisis, Goldman won a $5 billion investment from Warren Buffett’s Berkshire Hathaway as a vote of confidence.

Federal prosecutors notified Gupta in a letter that they had intercepted his phone conversations with Raj Rajaratnam, who, along with the Galleon Group hedge fund he founded, is fighting criminal insider trading charges in the case, the Journal said.

The exact nature of the conversation between Gupta and Rajaratnam could not be determined, the paper said.

In March, Reuters reported Gupta’s decision to step down as Goldman director, but it was unclear at the time that there was any association with the Galleon case.

In a March 22 letter made public two weeks ago, the U.S. government said it was examining trades by Rajaratnam and others in shares of several companies, as part of a wide-ranging insider trading probe.

Among these companies was Goldman, where trades between June 2008 and October 2008 were being examined. The bank’s shares traded between $74 and $187 over that time.

Gupta has not been charged in the case, and denies any wrongdoing in the matter, the newspaper said.

“Rajat has neither violated any law nor done anything else improper. He has always conducted himself with integrity in his business, philanthropic and personal life,” Gary Naftalis, Gupta’s lawyer, told the paper.

Goldman Sachs and the U.S. Attorney General’s office declined to comment to the WSJ.

Separately, in an interview with Bloomberg News, Berkshire director Thomas Murphy said Warren Buffett remained comfortable with the $5 billion investment that his company Berkshire Hathaway made in Goldman Sachs in 2008.

Gupta’s lawyer Naftalis, Goldman Sachs, Berkshire Hathaway and the U.S. Attorney General’s office could not immediately be reached for comment by Reuters outside of regular U.S. business hours.


(Reporting by Sakthi Prasad in Bangalore, editing by Will Waterman)

Goldman director in focus on Berkshire deal: report