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The jury in the high-profile insider trading trial of Rajat Gupta heard a 2008 wiretap in which now-jailed hedge fund founder Raj Rajaratnam apparently admitted he deceived Gupta over a USD 10 million investment and expected him to react like a "big boy" to the loss.
The wiretap was the last evidence former Goldman Sachs director Gupta's defense team presented in US district court here yesterday before it rested its case. Closing arguments by both sides will be made later today after which the case will go to the jury.
In the brief phone conversation on October 2, 2008, Galleon Group portfolio manager Sanjay Santhanam asks Rajaratnam about the Voyager Capital Partners fund, in which Gupta had invested about USD 10 million.
Gupta alleges he lost all his investment in Voyager and that Rajaratnam took his money behind his back, which led to a falling out between the two. For the fund, Rajaratnam had borrowed USD 300 million from Lehman Brothers, which filed for bankruptcy in September 2008. "Under the circumstances, how are you holding up?" Santhanam asks Rajaratnam in the phone conversation.
"Look it's part of the game. I mean, when you take leverage you, you know. My problem is I, I'm a big boy. I hope Rajat is a big boy. You know," Rajaratnam tells Santhanam, who was working on the portfolio at Galleon. Rajaratnam goes on to say, "And then I didn't, I, I, I didn't tell him that I took that equity out. Right. "What I want to do is show him... and I might say things like this instead of 20 million, 30 million in Lehman that we put a claim against and we have to wait for it."
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