I am going to look at this close up, to see if there are any clues that have fallen by the way side.

The most crucial part of the prosecution’s case – the stuff that would normally be regarded as hearsay but was admitted as an exception – are wire-taps, in which Rajaratnam mentions to his traders that someone has tipped him off about the Buffet investment in Goldman. In the same taps  he says he ordered his traders at Galleon to buy shares in Goldman as a result.

This is the pdf of the motion in which the prosecution requests that this hearsay be admitted as evidence of a conspiracy:

“On September 23, 2008, from approximately 3:13 p.m. to 3:54 p.m., Goldman’s Board held a special meeting during which it approved a $5 billion infusion of capital to Goldman by Warren Buffett’s Berkshire Hathaway. Until the public announcement of that transaction, which was made after the close of the market on September 23, Buffett’s investment in Goldman was confidential. Buffett’s $5 billion investment was particularly significant because it occurred in the midst of the 2008 financial crisis and approximately one week after Lehman Brothers declared bankruptcy. Buffett’s investment helped shore up Goldman’s
liquidity, as well as investors’ confidence that Goldman was going to survive the crisis.

Gupta participated in the Goldman Board call by telephone from a conference room in McKinsey’s Manhattan office. Gupta’s assistant, who was in McKinsey’s Connecticut office, dialed into the Board call, and then connected Gupta to the call. Gupta’s phone disconnected from the Goldman Board call at approximately 3:54 p.m. Almost immediately thereafter, Gupta’s assistant placed a call to Rajaratnam’s direct line at Galleon and then connected Gupta to the call. Gupta’s phone disconnected from that call at approximately 3:55 p.m.”

Got that?

Gupta was on the Goldman conference call (Board call) upto 3:54 and then the Gupta line was connected for about a minute to RR’s direct line at Galleon at 3:55.

Means the call from the Gupta line was one minute (3:54-3:55).

RR’s favorite trader and confidante Ian Horowitz isn’t around, so he uses other people.

At 3:57 a Galleon junior trader, Ananth Muniyappa, buys Goldman 100,000 shares of Goldman from Morgan Stanley.

At 3:58 a Galleon partner, Gary Rosenback, buys 250,000 shares from Deutsche Bank.

Keep those times in mind.

The next day,  September 24, 2008, before the market opens, RR speaks to Horowitz on his cell phone twice, unaware (so they say) that his phone was being tapped by the FBI.

Call One (7:09 AM)

In this call, RR refers to a call that had come in the previous day, Sept 23, at 3:58. He indicates that something good was happening at Goldman.

Lila: Notice the time, 3:58.

Now, look at the time when the Gupta call came in for a minute – 3:55.

Those aren’t the same calls, or are they?

Did RR just mistake the time?

Why was he that precise about it then?

Were there two calls – just thinking out loud here –  that somehow the prosecutors didn’t get? How do they know he was only referring to calls on his land-line?

Could he have got a cell phone call? I don’t know..I’d just like to know more.

This guy is operating a crooked hedge-fund ring, and he takes only calls on land-lines directly to his office?

But when he calls his conspirators, he uses a cell-phone, right?

So is there only one cell-phone? Your average teen-ager has at least two or three these days.  Even small-time crooks would know better. Why has everyone leaped to the conclusion that the call at 3:55 (on the Gupta office line) was the same call RR is talking about the next day to his buddies (3:58)?

The defense needs to get hold of ALL RR’s cellphones, walkie-talkies, ham radios, pagers and everything else a savvy operator might use to keep his chat about illegal stuff under the radar…

Indian businesses in Italy  targeted in retaliation for detention of Italian naval guards.

“KOCHI: The detention of Italian naval guards turned bitter with La Destra (‘The Right’), a right-wing organisation, forcing Indian restaurants in Rome to down shutters for a night as a mark of protest against the custody of their personnel.

Flaunting posters that screamed ‘Italy is with you’, ‘We miss you’, ‘Italy is waiting for you’, La Destra, supported by former Italian health minister Francesco Storace, held demonstrations in front of Indian restaurants.

But La Destra has no intention to boycott Indian products. “We just want our soldiers to be freed. The whole country is with them,” he said. The organisation boasts of 20,000 followers in Rome and more than a lakh across Italy.”

Comment:

This case shows a different aspect. The crowd is intimidating Indian businesses in retaliation for a political/military issue.

I can only imagine what would happen if an Indian crowd were to intimidate Italians in India, because they disagreed with Italian government policies or actions.  First, it would never happen.

And if it did, the international media would descend in a swarm, the targets would be plastered on the cover of TIME magazine and India would be hauled in front of a human rights abuses tribunal.

An international lawyer would be dispatched to sue the government and bankrupt it (no leftist worries about bankrupting poor people when they are suing governments; they only worry about it when the government spends money on behalf of businesses…not, let me add, because I approve of that, either).

The point I am making is, notice how a problem in one area is solved by intimidation in the public arena?

Just as, in the Gupta case, something that can’t be won on the merits is settled through media framing  and an aggressive judge, with an agenda.

From Shadow Warrrior:

Subject: South Asia type person convicted
To:

A South Asia type person has been convicted of insider trading. He used to head McKinsey, the criminal enterprise that made money by advising governments to rob the people and hand over a portion of that money to McKinsey.

My Comment

Yes.  Gupta is being made the fall guy for opening up India to globalization, a process I’ve criticized repeatedly. But, throwing him under the bus doesn’t undo that;  it only targets the Indian community, and it is unjust.  Opening up India to globalization was a POLITICAL PROCESS.

One can disagree with it or not. One can say it was fair or not.  One can have strikes and bandhs against it, fine. But using the legal system to go to war for your politics is a different thing.

It sets an very dangerous precedent.

Which Indian is safe now? If you are successful, the federal government with its access to every kind of communication, without even a warrant, can drag you out, concoct a case out of hearsay, cut a few deals with some crooked characters and then try you in the media, which is controlled, let’s not forget.

Other immigrants, especially dark-skinned ones, are going to be too afraid to stick with you.

The first thing is to be calm and hope that Mr. Naftalis and his team can bring attention to the actual facts in the case.

I have thought a lot about this case and there is no way that it is anything but an extremely misguided verdict.

Leave alone the facts in the case.

Just look at the way it was decided.

1. There has NEVER been such a high-profile, distinguished corporate figure caught up in an insider trading investigation and convicted. Never. Yet, is Gupta some kind of Madoff-type figure to warrant this special treatment? No. By all accounts (including Goldman Sachs’) he was a very trustworthy, reliable director.

So why the special attention?  Even if Gupta was insider-trading – which I don’t believe for a second – are you telling me with a straight face that no other corporate directors get insider information and use it?

Buffet getting inside information about Goldman being rescued so he can pump money into it – what do you call that? Clairvoyance?

2. There has never been an insider investigation using RICO laws (Racketeering Influenced and Corrupt Organizations) and wire-tapping, outside mafia investigations. Now, it’s being used on senior managers? Why not on Congress? Or the Federal Reserve? Was Lloyd Blankfein wire-tapped? If not, why not? Do only brown people get wire taps? So instead of actual Russian Israeli mafia figures being investigated, Preet Bharara shines up his resume on the nearest desi patsy he can find?

3.  There was – for the tenth time – NO QUID PRO QUO. Gupta never traded on any information; he did not ask anyone else to trade; he showed no profits for his information; and, in fact, he lost his entire investment. This is the strangest insider-trading case, where the guy lost!  Why this specially severe treatment for an exceptionally brilliant and successful man, well-liked by everyone? Not a corporate raider who put people out of work, not a penny-stock shyster who scammed his customers, not a con man, or a thief, or incompetent. Why the severe charges and penalties?

4.  There was no MENS REA. Gupta’s chat is casual, because he doesn’t see it as “leaking’ or “tipping.” That’s quite obvious.  Galleon was an important client, Raj was a business associate.

5.There is no hard evidence and the circumstantial evidence is open to interpretation. Bharara’s charts show Galleon trading after quarterly reports as though this is inherently suspicious. All traders trade quarter results. There is nothing unusual in that.  The prosecution shows profits resulting after information passed (allegedly). It doesn’t show the days when trades were made and money lost after calls. It’s purely selective, hypothetical, inferential, and voodoo justice.

6. The only person who ever said  Gupta was envious was Rajaratnam. The only person whoever said there was a board member leaking was Rajaratnam. The only person who said Gupta wanted to be a billionaire was Rajaratnam. Rajaratnam is a convicted swindler and criminal hedge-fund operator. He’s suspected of funding the Tamil Tigers, who since 2006, have suddenly risen in status in US foreign policy.

That’s why the leftist media in the US was so sympathetic to Raj and took so long (12 days) over his case, which was FILLED with smoking guns and was evidently and obviously a large, deliberate conspiracy, while taking no more than a few hours to convict Gupta, who has been proved only to have chatted too openly with Raj.

Lloyd Blankfein is snickering and heaving a sigh of relief, hoping that the body he threw under the bus will keep the cops busy while he tidies up shop.

Please read the case. Look at the facts.

Please go over to Deep Capture or Naked Capitalism and read what what is really happening on Wall Street and who the bad guys are.

For those who think it had to have been Rajat Gupta who passed on tips to Rajaratnam. Here are the people at Goldman who have already been shown to have been leaking and are under investigation

[For background, please read this previous blog post – The Other Goldman Insider Ring]

(and this is not including figures like Hank Paulson, Lloyd Blankfein et. al, whom we all know (wink, wink) would never talk out of school to their buddies, right?

Known Goldman leakers (Wall Street Journal interactive chart)

1. Henry King (needed to be protected, for some reason, according to the wire-taps of Galleon conversations) tech expert; Galleon was his client

2. David Loeb (also leaked to other hedge funds) a managing director in New York who acted as go-between between Galleon and SEVERAL HEDGE FUNDS. Ding-a-ling folks! Loeb, lives in NY, works for Goldman, does he talk to Lloyd in New York, or does he just make finger signs (occult ones) from a distance? Does he talk to Daniel Loeb (co-ethnic) also in the same building? Hello? Hello?

3. Paul Yook (left Goldman and went to Galleon)

4. Matthew Korenberg

5. Leon Shaolov (moved from Goldman to Galleon)

Bess Levin:at the Deal Breaker

“According to the Journal senior trader Leon Shaulov (previously employed with Sagamore Hill Capital and Goldman Sachs), and not Rajaratnam, was the guy you didn’t want to cross if you came into the office without the good stuff. Shaulov would verbally abuse those who couldn’t get enough material non-public information to make a buck, which seems standard. Who doesn’t do that? What really got Leo’s goat, however, apparently had nothing to do with people slacking on fact-finding missions. What set Shaulov off was jerk-offs who brought (actual) curses on the House of Galleon.

A senior trader, Leon Shaulov, who wasn’t named in any federal charges, sometimes berated traders or analysts who couldn’t uncover enough information that could move stocks, say several current and former employees. They add that Mr. Shaulov also would sometimes shout with joy when stocks moved the right way. Nearby, Mr. Rajaratnam would listen to the commotion through the glass door to his office. Through Galleon, Mr. Shaulov declined to comment.
People familiar with the matter say one of Mr. Shaulov’s regular targets was Gary Rosenbach, who helped start Galleon with Mr. Rajaratnam. One trader says Mr. Shaulov, in front of the rest of the staff, once turned on Mr. Rosenbach, screaming, “You’re a disease, you’re a jinx.”

Which is interesting because if you want to talk jinxes or sources of bad luck? How about we talk about the fact that Mr. Shaulov probably brought the mother of all jinxes on Galleon when he got named to this list.”

6. An unnamed “Mr. X”….who is maybe one of these guys..or someone else.

So that’s your highly confidential Goldman culture. Looks like they were live-in lovers of Galleon.

Didn’t the jury get to see all this?

From Wall Street Journal:

“Mr. Gupta, who is also a former head of McKinsey & Co., faces up to 20 years in prison on each of the fraud charges and up to five years for the conspiracy charge. But his sentence is likely to be significantly lower under federal guidelines. Sentencing is set for Oct. 18.

The 12-member jury, sitting in a New York federal court just blocks from Wall Street, handed up a quick verdict after a four-week trial. Janeat Brown, a 32-year-old fourth-grade teacher who was juror No. 5, said that in the first few hours of deliberations, 11 of 12 jurors believed Mr. Gupta was guilty.”

Even odder, the only jury member who didn’t accept Gupta’s guilt was someone with financial industry experience.

On Thursday morning,only one juror wasn’t convinced Mr. Gupta was guilty, according to Ms. Brown, the teacher. This person had previous experience in financial services and repeatedly drew upon it to make their case, according to Ms. Brown.

“It was sort of frustrating to know that the evidence was there but personal experience was being brought into it,” she said.

Lordy. The geniuses that one’s fate might depend on. One shudders to think…

First, rude little me is going to find out more about these people’s educational backgrounds and qualifications. Why was a nurse, a youth advocate, and a teacher  the best choice to hear the case? It involved fairly complicated legal notions. I’m not sure I quite grasped all of them. And I spent a couple of years studying Con Law.

How did these people make up their minds so fast when the Rajaratnam deliberation went on for 12 days?

I’ll tell you how. They’d already made it up, thanks to the case being tried in the press and by OccupyWallStreet-type agitprop.

Gupta was hung for his association with Galleon.  That’s why it took so little time.

And, not to be a bitch, but what was the racial composition of the jury.  Were there any brown people on it? As in, South Asians? How many South Asians were there? Or were there only natives (whites and blacks) filled with resentment for the man at McKinsey who took away their jobs? Were they all New Yorkers?

Is this what all Asians are going to face from the juries here? I’d rather have the Indian legal system then, with all its bribes, gridlock, and Jarndyce & Jarndyce complexities.

Much better to grow old in gridlock than be hanged for having a fat wallet and a chiseled profile.

Let’s face the truth. Indians are being targeted in this country, although they make no burdens on it and although US corporations, US investors, and the world  economy have all profited immensely from entering the Indian market. More evidence from street crime records:

“C.K. Patel, former president of the National Federation of Indian Associations, said, “We have reports that Indians were targeted in Atlanta. Indian businessmen and their establishments were being targeted.”

According to Patel, Indians are targeted because they keep jewelry at home. “There have been cases where they were robbed of their jewelry immediately after they purchased it from a shop and were bringing it home.”

“Some of our friends actually got robbed. We don’t want to be victimized when we are at home,” he added. “I feel confident I can use the gun and protect myself,” he said after receiving an hour-long training.

“I just wanted to see what it feels like and learn some safety issues, more than anything else, just in case I get into a situation,” Nivelle Bilimoria said.

Indian American communities in other parts of the United States have also been targets of robberies.
But this is the first time that they are taking training in shooting as a self-defense measure.

“Indians seem to be adverse, probably culturally, but once you settle down in this country, you have got to adapt to the country,” Dijjocam Raina was quoted as saying, adding that he had not held a gun in 20 years, but now he plans on buying one and keeping it close for safety.

Local police conceded that the Indian American community is being targeted by robbers who held them at gunpoint and snatched away their gold and other valuables.

Last month, police in Fremont, Calif., with a high Indian American population, arrested two men in connection with a string of robberies — Matthew Howard and Daryl Dove, who police said targeted individuals wearing “high-dollar necklaces and bracelets.”

Comment:

I was robbed in a very affluent neighborhood once.  Got into the bus and a well-dressed gentleman, with a rolled up umbrella and trench coat, slipped his hand into my pocket and removed a bracelet watch that I hadn’t had time to put on.  So that is my strange experience. I’ve walked around in ghetto neighborhoods, sometimes quite late, and nothing’s ever happened, and then at a bus-stop opposite my house, a guy from the same neighborhood robs me of a watch. A white, guy, for what it’s worth. And it was a pretty watch with jewelry. I felt so bad, I never wore anything like that again.  Only cheap trinkets.  Now I’ve stopped altogether.  So, when I remember all that, and listen to the unending stories about mortgage fraud, scams, robberies, murders, and home invasions, and then see Rajat Gupta, a decent man, being paraded around as the poster child for things he had no responsibility for, I really do feel something is sick, not in the justice system so much as in public culture.  It’s time for Indian-Americans to leave and it’s time for Indian students to stop coming to this country.  I’m sure this will be good news for most Americans.

It won’t be such good news, of course, when Indians reciprocate and stop foreign financial flows and investment in the country.  That’s coming too. And not a minute too soon.

Guardian:

“Much of the evidence brought against Gupta was circumstantial, and legal experts said they were surprised at the speed of the jury’s verdict.

John Coffee, Adolf A Berle professor of law at Columbia law school, said: “Even in the Rajaratnam case where there was more of a ‘smoking gun’ the jury took 12 days,” he said.

Coffee said Gupta’s legal team had mounted an “impressive” defence against a case that he said many prosecutors would have been reluctant to bring.

The prosecution never accused Gupta of personally trading on inside information but argued he benefited from his stake in Voyager, an investment firm he set up with Rajaratnam which invested in Galleon funds. The defense argued that there was no evidence that Gupta profited, or traded on, any alleged tip and said Gupta had considered suing Rajaratnam over Voyager, which failed.

Rajaratnam was caught on dozens of wiretaps discussing inside information and trades he had made, but the evidence against Gupta was far less compelling. The prosecution offered only one substantive conversation between the two men, and Rajaratna.”

In Indian blogger notes how trivial Gupta’s alleged crimes were next to what Boesky and Milken did.

Jesse at Cafe Americain, who deserves kudos for telling it like is:

This was clearly a case of failing to maintain GPS coordinates when burying the bodies for your masters, and failing to provide sufficient campaign donations to the plutocracy.

The pampered princes have thrown another one of their Immortals to the wolves.

So Lloyd has given up one of his thralls, and a whale sized proxy at that. But nonetheless still prey whose moment had come.

Who will take the axe for Jon Corzine and Jamie Dimon?

Key Takeaway: Unless you are a made member of the Billionaire Boys Club, too big to jail, and not merely a faithful servant, take the deal…

Daily Word: Anagnorisis (an·ag·no·ri·sis) from the Greek anagn?rizein, to recognize. See also hamartia

the point in the plot, especially a tragedy, at which the protagonist recognizes their or some other character’s true identity and motivation, or discovers the true nature of their own situation

From Bloomberg:

“Gupta, 63, was found guilty of securities fraud and conspiracy by a federal jury in Manhattan today in its second day of deliberations. The trial began May 21. Securities fraud carries a maximum prison sentence of twenty years. Conspiracy carries a five-year maximum prison sentence. He will remain free on bail until his sentencing on Oct. 18…

Gupta is the most prominent of those convicted at trial or to plead guilty since the nationwide crackdown began in October 2009. To date, the U.S. has brought cases against 66 traders and their sources from Wall Street to Silicon Valley. No one has won an acquittal; six cases are pending.”