Ha ha. Looks like I was right. Gupta wasn’t convicted for anything he is alleged to have done at Procter and Gamble. Nope. Nor is it for the audit committee call. It’s for the leak of the Warren Buffett investment in Goldman. Like Buffett’s investment wasn’t the insider deal to end all insider deals.

For some strange (NOT) reason, that’s what got the jury to convict. Maybe, it sounded more nefarious. Personally, I don’t find it plausible that that was a tip.

He wouldn’t have waited to tell it to Raj just minutes before closing, when there was a good chance a trade wouldn’t go through. He would have rushed and called it in earlier in the last ten minutes….if he did call it in.

Remember the Jury did not hear the tapes of Loeb and King leaking. I suspect it was Loeb who called that in and then set Gupta up. Loeb had plenty of ties with hedge-funds and was tipping them too.

So this will go to appeal. Judge Rakoff has done some strange things in this case, and some people think he’s a grand-stander.

I  have my own thoughts about that, but I’m a bit tired and upset by all this.

No love for Obama donors, Clinton buddies, or people who get sweetheart deals on public land in India. But that’s beside the point. You can’t convict people on criminal charges because you don’t like their politics, or how much money they had, or the fact that someone traded after talking to them. It was ALL circumstantial evidence and the defense never even got to present its side fully.

Did Gupta even know that Raj was trading immediately after talking to him?

I think this is why the founders wanted a trial to be with a jury of your peers. Then no racial and class elements get into the judgement.

And what’s with Preet Bharara? He’s supposed to be such an impeccable figure. He gloats about how Gupta is going to be spending time in a small cell? This is a federal prosecutor?

Dealbreaker:

“So he’s off the hook for his work at P&G, with the lesson perhaps being that people will believe much more nefarious things about Goldman than they will about Procter & Gamble. More amazingly, the jury decided that he did not leak confidential information from the 2007 Goldman audit committee call that he seems to have conferenced Raj Rajaratnam into; perhaps they bought the defense that he was having an unrelated conversation with Rajaratnam during the entire duration of the Goldman call.

On the other hand, he was convicted of leaking Warren Buffett’s investment in Goldman in September 2008, which prosecutors claim made Rajaratnam $840,000 in illegal profits, and of leaking Goldman’s Q3 results in October 2008, which allowed Rajaratnam to avoid “several million dollars” in losses by selling 150,000 shares before those results were announced. You can argue – and the lawyers will! – over how much that was, but if you take the dumb math of (1) Raj sold at around $100 (actually ranging from $97.74 to $102.17) on October 24 and (2) GS closed at $76 on December 16, when Q3 results were announced,* then Raj saved some $3.6 million on that trade. (The government thinks it’s $3.8mm.) The acquitted trades were smaller: the March board call seems to have made Rajaratnam about $700K (350,000 shares with a $2 one-day pop on the news), while Raj’s shorts on P&G made him about $470K.

I suppose it’s nice that the jury threw him a bone on a few counts, and it might even help his bottom line. As we’ve discussed, the main thing that factors in to his sentence is how much money was involved. For Raj, not for him. There is a way in which this makes sense for certain financial crimes: for Allen Stanford and Bernie Madoff, each dollar that they made really was stolen from widows and orphans, and the bigger the theft the more harm they caused. For Raj Rajaratnam, the harm is more attenuated – nobody lost their life’s savings because they sold GS shares at market prices to him rather than to someone else – but there’s still some reason for a correspondence between size of profits and size of jail term, at least for deterrence purposes. I wouldn’t spend a night in jail to make $10, but for $10 million, I’d think about it – but not 11 years in jail. That theory breaks down for tippers like Gupta, who I guess the jury concluded knew that Rajaratnam was trading on his tips, but who could hardly have known how much he was trading. Nonetheless his time is going to be determined primarily by Rajaratnam’s trading decisions, rather than anything that he did or didn’t do.”

So, now I got another clue about the plot to take down Rajat Gupta.  He’s a big Obama donor.

I was wondering about it. After all, Goldman was a big Democrat donor.  So, of course, was Raj Rajaratnam.

So I dug around and I found that Daniel Loeb, of Third Point LLC, a firm implicated in naked short-selling with Goldman (taking down firms like Lehman, and also Overstock) doesn’t like Obama at all:

EXHIBIT A – DANIEL LOEB LETTER TO OBAMA, DATED JULY 24, 2011.

“The budget is not the only thing in deficit today, as a paucity of leadership has left the country without a stable framework in which businesses can conduct business, investors can invest and consumers can consume without a high degree of uncertainty and fear,” the letter begins.

While Mr. Loeb concluded last year by saying he would no longer be writing Third Point’s quarterly investor letters, his apparent dissatisfaction with President Obama has roused him to once again pick up his pen for another blunt and acerbic piece.”

From the letter:

“It is increasingly difficult to avoid the conclusion that while Washington burns, President Obama is fiddling away by insisting that the only solution to the nation’s problems — whether unemployment, the debt ceiling or deficit reductions — lies in redistribution of wealth. Perhaps a plan that led the way forward by expanding opportunities rather than redistributing outcomes and emphasized growth and prosperity for all would be met with less political resistance.”

July, when this letter went out,  would be just after the May conviction of Galleon, and the meme circulating about the “envy of the richer” which focuses attention on the millionaire manager crowd.

The summer of 2011 was also when the OccupyWallStreet movement started to be hatch. Occupy has been seen by some, including me, as an Obama re-election strategy.

I do sympathize with some of OWS’s goals and concerns, however, and I think its support for financial reform is correct. I daresay, the hedge-fund industry doesn’t think so.

The OWS crowd is a big critic of Goldman Sachs and the hedge-fund industry and a supporter both of financial reform and of Elizabeth Warren, who has proposed regulation of the hedge-fund industry and the Tobin tax (on trading) as well. She – and OWS –  have thus become a No. 1 target of the hedge-fund crowd.

So has Obama, in so far as he pursues socialist policies that might attack hedge-funds.

Loeb has a history of colluding with the banks and engaging in naked short-selling to destroy companies.

[Mark Schwartz who founded the New Silk Road fund that Gupta joined, left to manage money for Soros. He’s now returned to Goldman.]

Gupta was supposed to have left Goldman too. If he had, he’d have missed being taken down. He stayed to please Blankfein and got caught up in one of the biggest trading cases in US history.

Other questions. Why was Rajaratnam caught on tape agreeing to protect Henry King, another tipster?

Protect him for whom?

Who were the other funds that David Loeb was leaking to?

Was it simply coincidental that Gupta lost his investment in the Galleon fund because it was taken down in the collapse of Lehman in 2008.  Remember, Lehman was the target of collusive action between the hedgies and Goldman Sachs. That’s what’s emerged in the Overstock lawsuit.

Too many coincidences for comfort…

Part One: Rajat Gupta Trial: The Jury is Wrong

Previous posts about the Rajat Gupta trial:

1. The Real Crime of Rajat Gupta

2.The Other Goldman Insider Ring

3. Three Show Trials In Search Of A Crime

4. If Rajat Gupta Deserves To Be Jailed, Then

5.The Problem With The Rajat Gupta Insider Trading Case

6. The Scape-Goating Of Rajat Gupta

7.Former McKinsey CEO Gupta Faces Possible Hundred Years In Prison

Previous posts about Rajat Gupta:

PROBLEM IV: NO MOTIVATION

The next problem is with the motivation in the case. There isn’t evidence of any.

Rajat Gupta has already climbed as high as anyone can climb in corporate America. He was paid a million bucks for a few weeks work on the Goldman board, one of many on which he sat. His net worth is over $80 $130 million.  He has held some of the most prestigious positions in corporate America, and has the ear of some of the richest and most powerful men in the world, from Bill Gates to Bill Clinton, from Mukesh Ambani to Manmohan Singh.

Why would he destroy all that for Rajaratnam, a hedge-fund operator whom he didn’t know all that well? Gupta might not be as rich as Rajaratnam but he had plenty of access to money-making opportunities.

Besides, nobody who knows him thinks he was either greedy, ostentatious, or envious. He led a relatively humble life, socializing mostly with other Indians, and eschewing the trappings of Wall Street. He wasn’t in debt, he had no money problems that we know of so far, and he had four daughters, whose lives would be badly affected by any kind of wrong-doing.

He was deeply involved in educational work, from all accounts quite sincerely and effectively.

What’s more, he’d actually announced his departure from Goldman Sachs earlier in the same month in which he’s supposed to have tipped Rajaratnam off on the Buffet investment (September 23, 2008)

It was only because Lloyd Blankfein had asked him to stay, to overcome any perception of instability his departure might have caused the firm, that he’d stayed on.

In the context, Blankfein’s request should be tagged as odd. It needs to be researched some more. Was Blankfein setting him up in  some way?  I’ll explain later in this piece, why that question needs to be raised.

What about the calls to Rajaratnam, which someone have called very deferential. They hint that the calls show he wanted to please Big Raj.

I listened to them and I honestly didn’t get that. I got a degree of insecurity, but not of deference. Gupta didn’t know the Wall Street world of private equity and hedge-funds. It was new to him and he knew he didn’t know.  His voice sounds cautious and insecure, not deferential.

The caution is what makes me think it’s unlikely he knowingly participated in insider-trading.  The insecurity is something a seasoned manipulator like Raj Rajaratnam would have spotted immediately.

Raj knew how to hone in on weak spots. It’s a mark of  conmen and sociopaths of all kinds. And indisputably, you have to have a streak of  both  to manipulate people to the extent Big Raj  seems to have.

There’s another even more simple explanation for the deference.

Galleon was an important client of Goldman’s.  Goldman had a habit of makings marks of its clients. Gupta might have needed to reassure the shrewd Rajaratnam about that.

Raj had also donated to a pet philanthropy of Gupta’s, The American India Foundation, at a time when no one else would. Gratitude for that and a certain ethnic solidarity would have also played a part.

Remember, Gupta is a man who didn’t socialize with his white counterparts. He was more comfortable in kurta-pajamas and Hawaiian chappals than teeing off on golf courses.

He made it in the corporate world solely on his smarts. No one denies he was extremely brilliant.

Gupta was also involved with a private equity firm with Rajaratnam, New Silk Route, focusing on Asia. NSR was set up by a Goldman associate, Mark Schwartz, who left Goldman to manage a Soros fund.

Put another sticky note on that one. It needs to be explored a bit more, because Soros is alleged to be a part of the Goldman-hedge-fund mafia, fingered by Patrick Byrne, CEO of Overstock, and sometime protege of Warren Buffet.

It’s the Buffet deal that Gupta is alleged to have leaked to Rajaratnam, seconds before closing, according to the Feds.

This same Mark Schwartz, an Asia specialist,  has just returned to Goldman. There may be nothing odd in all this. But it’s curious.

It’s also curious that all the people involved in the NSR, including Rajaratnam, have been fined or otherwise penalized by the government. Except Mark Schwartz.

I’ll return to this angle later, but for now, I’m just trying to show that there were many reasons for Gupta to be in touch with Rajaratnam.

These reasons, and not “envy,” are probably why Gupta was calling Rajaratnam.

But it was the meme “envy” which the press repeated over and over.

Why?

Once more, Rajaratnam is the  sole source.

It was he who suggested that Gupta was suffering from “billionaire envy” in tapes that surfaced during the Galleon trial, which lasted a couple of months (March-April, 2011).

Again, relying on the word of a man convicted of multiple counts of securities frauds, who made a living out of manipulating his tipsters and his targets, is not smart. He probably knew how to manipulate the media too.

Raj’s checkered past included fines as well as suspected ties to charitable organizations some call fronts for the terrorist Tamil Tigers. That  means he would have been vulnerable to pressure from the government to say what they wanted him to say.

He could even have been roped into some kind of covert operation with him.

US policy in that region, strongly anti-Tamil Tiger until about 2006, changed – at a covert level -to being pro-Tiger. That’s how Bruce Fein explains it, anyway.

A senior lobbyist and legal advisor to the Ron Paul campaign, Fein is a neo-con, whom FBI whistle-blower Sibyl Edmonds has fingered as tied to money-laundering for terrorist groups.

2006- 2007 is the time when a lot of surveillance and psyops got underway – including, we now know, intellipedia, wikileaks (tied in to Soros in multiple ways); and the Stuxnet worm (which I tagged on this blog as a government operation, a while back).

The reason these ops went into effect was probably the world-wide discrediting of the US media over the Iraq war. There had to be a new, more covert way to influence public opinion to support war. There had to be a new way to co-opt the opposition.

There had to be a new way, really, to wage war.

There was. The new war-making was through social media, through professional hacking (Anonymous),  mass-leaking/hacking (wikileaks), nternet psyops.

The new war was conducted through the law and the courts (human rights abuses), illegal and collusive short-selling,  international tribunals,  NGOs and “color” revolutions, all meant  to destrabilize countries.

We can see examples of the new war-making from Tahrir Square the Anna Hazare movement to Occupy Wall Street. This is managed revolution, the other face of managed capitalism.

The globalists have already deployed the “color” revolutions against the Muslim world, Stuxnet against Iran, and naked-shorting against American firms; they are now deploying Trojan horse NGO’s, wikileaks and the legal system against  India. Indian business men have become the patsy for the globalists.

So it’s not inconceivable that Rajaratanam, parallel to this transformation of the Tamil Tigers from bad guys to good guys, got roped in to playing a role in some kind of government sting, either willingly, or under pressure.

The Tamil Tiger transformation corresponds to the time in which the globalists, having got a foot into the lucrative Indian market (Rajat Gupta’s career is inextricably entwined with this phase), now move on to the next phase – undermining the country to create a more secure foothold for their own interests.

This dual strategy of building up (through the business world) and tearing down (through Dalit secession movements, pro-Tamil Tiger advocacy, human rights activism (liberventionism), trojan horse NGOs and missionaries) can be seen very clearly in Tamil Nadu. There, Chief Minister Jayalalitha has bent over backwards for corporations, western NGOs and missionaries, at the expense of the needs of the local population, the equitable interests of Hindu temples and social organizations, all with the willing help of  the very leftist Indian English language media.

Back to my story.

Rajaratnam could very well have cut a deal or even be used in some kind of frame-up, to get a better deal for himself from the prosecutors. His eleven year sentence (much less than he could have got) has been put down to his bad health, but he could have cut a deal to drop or cover up other evidence against him.

Such things aren’t exactly unheard of.

He says he didn’t. He says he could have but he chose not to implicate Gupta.

Has anyone ever heard of such a fine way to cover for a fellow conspirator,  by announcing in the international press that you are covering up for him?

Raj, a guy who swindled Gupta of his $10 million and then jeered about it on tape to another person, is really Jesus Christ taking the rap for someone else?

Raj was part of Wall Street. He had tipsters all over the place, even a blonde bombshell who seduced managers at firms to get them to reveal confidential information. He claimed he didn’t know where the line between zealous research and insider-trading really lay.

Oh really.

Again, his words don’t sound credible.

Yet it looks like he got very sympathetic coverage in the New York press, far more sympathetic than Gupta has got so far. Maybe this has to do with his charity work. But Gupta’s done that too. Maybe it’s all the money he put into the Democrat party. But Gupta’s done that too.

I suspect it has more to do with his running Galleon, a huge hedge-fund, where, if we take David Loeb at this wire-tapped word, the tipsters were passing tips to other people on the Street, as well.

Which other people?

Were they, like Galleon, other friends/clients of Goldman? Did they include anyone from that short-seller circle that include Daniel Loeb, Jim Chanos, and even George Soros?

Hedge-funds, it’s been documented, heavily influence some of the most prominent financial and news magazines, including Fortune and Barron’s. They have strong ties to financial writers across the board. Many of those writers exchange information and money with each other. This too has been documented.

The writers make their names, the short-sellers make money by targeting firms.

It can end up being a form of racketeering.

The evidence shows that poor dear Goldman Sachs, victim in this case, is one of the most prominent banks colluding with hedge-funds and writers in attacking companies they consider commercial rivals.

Gupta, associated with both McKinsey and indirecrtly, via McKinsey, with Enron is thus a perfect target, rich in symbolism and highly  visible, for the short-seller- bank mafia, whose kingpin is Goldman Sachs.

The masses (egged on by leftist bloggers and writers think they are attacking Goldman Sachs in taking down Gupta. Instead, they are doing Goldman’s job for it.

Or maybe they are all, mob and expert class both, simply stupid.

Goldman needs a patsy. It’s not going to be Blankfein or Paulson.

Rajaratnam, with extensive ties among the hedge-funds,  probably knows the dirt on a few big fish on Wall Street and he  might have been able to cut some kind of deal to let them off the hook and substitute a convenient patsy instead.

Managers are not the biggest honchos on Wall Street, although they attract the anger of the masses the most. Hedge-funds are, and an ambitious prosecutor from New York might prefer to target low-hanging fruit rather than ruthless billionaires.

Gupta, as Raj shrewdly guessed, was not a “big boy.” He was a dolphin, swimming not with tunas, as his friends have claimed, but with sharks.

PROBLEM 5: SUSPICIOUS MEDIA FRAMING

Rajaratnam makes his claim about Gupta’s envy in a noticeably sympathetic article penned by Suketu Mehta, the Bengali born author of Maximum City, and one of the brightest lights in the desi community in India.

Mehta is a  writer whose career has been built on writing what the Western media establishment (largely on the left) would like to hear.

Whether he consciously tailors his opinions is beside the point. His opinion are the opinions of those among whom he makes his livelihood.

In his best-known book, “Maximum City,” a brilliant book about urban Bombay, Mehta used a certain Bombay film-maker to get an inside view of the industry, and then, trashes him. That should tell you about what Mr. Mehta might or might not be capable of  in pursuit of his career.

In the interview with Rajaratnam, Mehta blames Gupta’s alleged misdeeds on the fact that Indian-Americans care too much about money.

I guess it would take an Indian who left India in his teens, has the luxury of living in New York and  making writing his main profession  (you couldn’t make a living writing in India) to lecture Indians on the importance of money.

Not caring about money is a luxury that only those who enjoy the benefits conferred by industrial production, government welfare, as well as the booty of empire, can afford to lecture anyone else about.

In India, if you do not care about money, you will not survive. You certainly won’t make enough to buy a plane ticket to come over to New York, go through elite schools,  and then jet around in search for stories. You would be suffocating on a bus, working 6 days weeks, without a/c in 45 DEGREE CELSIUS heat in a taxing job, made unendurable because of 8 hour a day electricity cuts caused by the huge demand placed on the infrastructure by factories.

You would care a great deal about money, because you would need lots and lots of it  to access clean water, sewage, internet, AC, cars, and all the other luxuries available even to poor people who’ve had the great good fortune to live in the US or move here. Would Gupta prefer that Indian Americans care less about money? Would they then have had anything left over to donate to, say, the Asian tsunami victims?

I wonder what Mr. Mehta did for them by the way? We know what Mr. Gupta did.

But his column has its propaganda use.

All the young Indians hoping to make a literary career in the West will take their cue from it. So will Indian opinion-makers, anxious to seem self-critical, socially aware, and au-courant with the latest thinking in the West.

Thus the English language media in India too becomes an echo chamber of the West.

This sedulous credulity is terrific for the empire because it means the target population need not even be brainwashed. They’ll do that themselves.

Behind Mehta’s little trope of envy, though, the truth is very different.

The truth is that few of Gupta’s legions of friends and associates over years think the man was greedy or even ostentatious or envious.

The only negative description of him that surfaces in the press is that he was greedy for the limelight (Sukutu Mehta of course isn’t), but this too comes from unnamed sources, so  how do we know they weren’t simply made up by a rival?

The quote could even be part of some kind of media psyop.

Why someone might wonder do I ascribe such weight to what might just be a casual comment on Mehta’s part?

Because the major themes floated in the mainstream outlets are never casual. They are ALWAYS tailored to fit US state interests.

I’ve shown before how one such meme, “green shoots,” was used with tremendous effect on the economy and on policy making in 2009.  My 2005 books, “Language of Empire,” explores the breadth and depth of such media operations.

The “envy of the richer” is one such meme.

A Google search shows the meme was first floated in an April 27 2011 article in the Wealth report of the Wall Street Journal, “Why the Rich Envy the Super Rich?

It features Rajat Gupta’s photo and Raj Rajaratnam’s words prominently.

Insider-trading defendant Raj Rajartnam put it well when describing his millionaire pal Rajat Gupta–the former McKinsey CEO and Goldman Sachs Group director (right)–who wanted to swim with the bigger fish like Henry Kravis.

“My analysis of the situation is, he’s enamored with Kravis, and I think he wants to be in that circle,” Rajartnam said in a conversation picked up by federal wiretaps. “That’s a billionaire circle, right? Goldman is like the hundreds of millions circle, right?

The article, by Robert Frank, notes correctly that CEO’s are the poor boys on Wall Street, making millions, where their counterparts in the hedge-fund world pull in billions.

Frank doesn’t mention the more important point of all this. CEO’s have obligations and duties and restrictions imposed on them to a far greater degree than hedge-funds. Yet, hedge-fund managers, in bed with many financial journalists, rarely come under media fire or scrutiny in the way managers do.

The meme reappears in October 28-30 2011, via the left antiwar site Counterpunch, for which I have also written, in a fine article by Rob Urie, which I linked at the time, and with which I thoroughly agree. None of my analysis is meant to suggest that Urie has anything to do with all of this.

The point of the meme is to counter the popular argument often made in libertarian circles that socialism is driven by envy. It redirects the accusation against the rich themselves.

VI JUDGE RAKOFF ADMITTED HEARSAY AS EVIDENCE AGAINST GUPTA

Loeb, as I said, was not the only tipster at Goldman Sachs.  There was also a technology analyst, Henry King and another tipster identified only as Mr. X.

A fourth leaker has also popped out of the woodwork recently.

But Judge Rakoff thinks none of the tapes of  Loeb’s leaks, and presumably of the others, are worth hearing.

But it’s not the defense’s case but the whole prosecution case that rests on hearsay, as Reuters blogger, Alison Frankel, argues cogently:

Kramer Levin first of all asserts that Rakoff cannot rule on the admissibility of the crucial Rajaratnam tapes until the government has established by a preponderance of evidence at trial that Gupta is part of the insider-trading conspiracy. That’s been the rule in the 2nd Circuit for more than 40 years, according to the brief. “The government seeks to dispense with the inconvenience of a trial – and Mr. Gupta’s testing of its trial evidence – by asking the court to admit alleged co-conspirator statements before trial, with virtually no evidence in hand, based largely (or perhaps even entirely) on bald statements in its brief that are unproven and, in many instances, unprovable,” Gupta’s lawyers wrote. “Worse, the government seeks to apply that truncated procedure with respect to out-of-court statements it believes are central to the case. The government cites no case in which any court in this circuit has departed from long-settled practice to proceed in that fashion.”

The brief goes on to analyze why the taped conversations between Rajaratnam and Galleon trader Ian Horowitz and Galleon Asia chief David Lau aren’t admissible because they don’t implicate Gupta in a conspiracy. In two conversations with Horowitz on the morning after the Goldman board was informed that Berkshire Hathaway was investing $5 billion in the bank in September 2008, Rajaratnam made elliptical references to “something good” he had learned about Goldman that led him to snap up some 200,000 shares of the bank in the final minutes of trading the previous day. Prosecutors allege that the “something good” was early news of the Berkshire investment, passed along by Gupta (as per phone records) immediately after the Goldman board learned of the capital infusion. And in a call the next month with Lau, Gupta said he’d “heard yesterday from someone who’s on the board of Goldman Sachs” that Goldman’s earnings would be drastically lower than analysts expected. Prosecutors assert the tip came from Gupta, and Rajaratnam dumped 150,000 shares of Goldman after receiving it.

But according to Gupta’s lawyers, to bring in the tapes under the hearsay exception for conspiracy, prosecutors have to show that Gupta knew Horowitz and Lau were part of Rajaratnam’s insider-trading ring and made the wiretapped statement to advance the conspiracy. They assert the government fails to do either. Prosecutors, they argue, can’t even establish that Horowitz, an unindicted co-conspirator in the Gupta case, took part in Rajaratnam’s insider trading on the stocks at issue in the Gupta prosecution, let alone that Gupta had any idea of Horowitz’s involvement with Rajaratnam (whose conduct Gupta claims to be ignorant of). And even if prosecutors can squeak through the gate linking Gupta, Horowitz, and Lau to Rajaratnam’s insider-trading scheme, Kramer Levin’s brief said, they can’t show that Rajaratnam’s statements to Horowitz and Lau furthered the conspiracy.

The Galleon chief’s “vague and generalized statements about ‘something good’” actually suggest that Horowitz wasn’t part of any conspiracy and that Rajaratnam wasn’t tipped about Berkshire, according to Gupta’s lawyers. “It makes no sense that Rajaratnam would use such vague and indefinite words with Horowitz if he had, in fact, received a valuable tip the day before,” the brief said. “Likewise, Rajaratnam’s complete failure in two separate conversations to supply Horowitz with the name of the person from whom he purportedly heard the ‘something good,’ or even some identifying information concerning that person, further confirms that Rajaratnam’s statements were not part of any insider trading conspiracy.”

According to Kramer Levin, the vagueness of the comments to Horowitz also argues against their admission as statements against Rajaratnam’s interest. The hearsay rules assume that when witnesses offer secondhand evidence that incriminates them, that evidence is reliable because it’s a statement against their interest. The government contended that Rajaratnam’s alleged disclosures that he received Goldman Sachs tips are incriminating statements that fall under that hearsay exception. Kramer Levin countered that Rajaratnam didn’t incriminate himself in those inconclusive conversations, and, moreover, the exception for statements against interest only applies when there’s corroborating evidence that the hearsay is trustworthy. Rajaratnam is a known braggart who lied about and exaggerated his access to inside information, Kramer Levin argued. Nothing he said is trustworthy.

The same is true, Gupta argued, of Rajaratnam’s statements to Lau – who’s not even an unindicted co-conspirator. That taped evidence “merely described supposed past events without requesting action by Lau, [so] settled law precludes any finding that they were ‘in furtherance of’ a conspiracy,” the brief asserted.”

VII  PROSECTION CASE RELIES ON WORD OF CONVICTED CRIMINALS

Anil Kumar, who chats with Rajaratnam about Gupta’s supposed envy is a convicted criminal, a part of the Galleon conspiracy, and a man who cut a deal with the Feds to wear a wire and turn in Rajaratnam.

He’s a pillar of credibility?

How do we know what kind of a deal the Feds have given him to say what he’s said?

That goes double for Raj Rajaratnam himself. We have only Big Raj’s not very good word that he had a guy on the Goldman and Proctor & Gamble boards leaking to him. Raj could have been boasting and bragging. He obviously had a big ego, what with the in-office massages he paid his employees, the pool-parties with hired gals, and the blonde-bombshells he used to bring down unwary CEO’s.

Raj could also have been playing his tipsters to get more information out of them. Two of them (Chiesi and Kumar) have already said as much under oath.

Raj was a shyster. He cheated Gupta out of his investment of $10 million, the very money the prosecution said was the benefit Gupta received from the tip.

“Do you think he’s a big boy?” he says, while telling Anil Kumar that he had drained the liquidity from Gupta’s investment with him (that is, stolen it). Kumar, another repellent character, was actually Gupta’s protege. He would never have got where he did without his mentor.

8  RAJARATNAM CHEATED GUPTA OUT OF HIS INVESTMENT

So if Gupta got no payment for any information, didn’t trade himself, and didn’t make money indirectly from it,  how is it insider trading?

Oh, then the government changed its story and said the tip was made to recover the money that was stolen.

That’s slick. Which is it? Did he tip Raj, with the equity in the Voyager  Fund as a payoff, or did he tip Raj in order to get back the equity in the Voyager Fund that was stolen from him? Do you see how amorphous the Fed’s case is?

9. GALLEON CASE IS BEING RETRIED

Even Judge Jed Rakoff admitted that Gupta was being tarred with the Galleon case. But that’s been tried already and Rajaratnam is in the slammer. Why is Gupta being tried for what Rajaratnam did?

10.  GOLDMAN CORPORATE CULTURE WAS CORRUPT AND FILLED WITH INSIDER TRADING

Meanwhile, while the government rests its case on circumstantial evidence of the flimsiest sort (trading taking place after quarterly reports and other unheard of events), brings in hearsay, and uses improbable charts that track all Galleon’s gains after alleged tips but none of its losses,  the defense isn’t allowed to bring in the considerable evidence that Goldman had tipsters running around all over the place.

Why can’t the defense introduce tapes that go to show that at least two (and possibly four) other Goldman employees were leaking tips to Galleon?

How do we know that Lloyd Blankfein wasn’t leaking the information himself? Just how credible is Lloyd Blankfein, Goldman’s CEO, anyway?

Who buys Blankfein in the role of corporate sphinx?

Not me.

I’ve been watching Goldman Sachs for longer than anyone else in the media.

Goldman has a multi-decade history of corruption and insider-dealing with the government so extensive it’s been called Government Sachs.

Goldman’s entire business model is insider-dealing. That’s what bond trading is, for practical purposes.

And G-Sachs is notorious for treating its customers like marks.  Look it up. It’s been fined repeatedly for conflicts of interests between its analysts and it trading desks.

Now Goldman is a model of circumspection?

(TO BE CONTINUED)

Rajat Gupta, former chief of consulting giant McKinsey and the face of the global outsourcing business since the outsourcing revolution began in 1993, is now being made the whipping boy for the sins of the Federal Reserve and its allied Wall Street mafia, including Goldman Sachs, now cast in the improbable role of injured innocent.

ONE: GUPTA IS THE PERFECT PATSY FOR THE FINANCIAL CRISIS

Gupta, a charismatic and extremely successful and well-regarded Indian management consultant and philanthropist, is a convenient scape-goat for the real villains of the global financial heist.

Why?

Because of his connection to McKinsey and Goldman….

and also, indirectly via McKinsey, to Enron

firms synonymous with the excesses of globalization and the tech bubble, respectively.

A foreign born, multi-milionaire businessman, in an industry blamed for the loss of American jobs,  works as a ready-made cartoon villain for the anti-globalization crowd. He’s the perfect foil for the “enforcer of Wall Street,”  Preet Bharara.

Bharara is also an Indian, a Sikh.

Anyone with half a brain has seen this puppet show before.

Remember the election of Barack Obama, a  colored man, who, we were supposed to believe, would think harder about bombing colored folks abroad?

We can see how that played out.

PROBLEM II:  NO CLEAR QUID PRO QUO AND MENS REA

Then there is the first big problem with the case itself.

The wire-taps of Gupta talking to Rajaratnam  do not record an actual tip being passed on for a tangible benefit and do not even name Gupta as a tipster, even though the mighty federal government, SEC and FBI both, have been investigating the case since 2007, surreptitiously taping Gupta between March and December 2008, and although they have about 2000 tapes altogether.

Those tapes make him look plenty guilty to the lay public though.

To the lay public, chat about Goldman board meetings sounds exactly like insider-trading.

It’s not. It’s careless, injudicious, irresponsible, and a violation of Goldman rules, and, had it been any other firm but Goldman Sachs and anyone with a less stellar record, unethical.

None of that necessarily adds up to a criminal insider-trading conviction.

For that you almost always need a quid-pro-quo and evidence of mens rea (guilty mind).

I said almost, because, the SEC has in recent cases aggressively expanded what a benefit might mean to the tipper, and what constitutes use of material nonpublic information by directors of a company.

Nonetheless, mere pillow-talk, even with a slick operator like Rajaratnam, doesn’t cut it.

Here is what Jagdish Bhagwati, a highly respected Columbia economist, had to say about Gupta’s case:

“You go to a meeting and you hear something which technically could be considered insider information and you go to your friend and you say ‘Arrey [Lila: this is the Indian equivalent of “buddy”] you know what happened?’  And he doesn’t realise – and that is Rajat’s bad judgment – that this guy is a crook. I think this is what may have happened. It is the product of Indian culture….  I think most people will see Rajat as somewhat of a victim…..The fact that he has been doing a lot of good things for India and the Indian American community is going to stand in his favor. There will be cynicism among some people, but the vast majority will see him as a good man, who got caught on the wrong side of the street.”

There’s enough circumstantial evidence to open a civil case, sure.  But the SEC didn’t do that. It opened an administrative hearing, where he would have had a much harder time defending himself. Everyone else involved with Galleon got civil cases filed against them.

That was weird, just there, and even Judge Rakoff admitted it.

“Usually, the fact that the SEC was allowed to proceed with its case means there won’t be criminal charges,” said Dewey, a defense lawyer who isn’t involved in the case. He also said criminal charges are “unlikely.”

U.S. District Judge Jed Rakoff in Manhattan, who oversees a related SEC lawsuit against former Galleon trader Adam Smith, said March 16 that the agency’s decision to file only an administrative action, and not a civil suit, was “bizarre.”

That’s the reason Gupta counter-sued. And the SEC dropped their case last year.

Then the FBI opened a criminal case. Many people think it never should have been.

PROBLEM III: EVIDENCE OF MULTIPLE TIPSTERS KEPT FROM JURY

There’s a third big problem with the case.

Judge Rakoff  refused to allow the jury to hear wire-taps of another Goldman employee, David Loeb, caught tipping off Rajaratnam, repeatedly, about Intel, Hewlett Packard, and Apple, claiming they were hearsay.

But they’re not hearsay. They are absolutely crucial to the defense’s argument that someone else was tipping Galleon from Goldman.

We have only Rajaratnam’s shaky word that there was a tipster on the Goldman and Procter & Gamble board at all. He doesn’t ever name this person. Ever.

But we do have plenty of tapes of someone actually giving tips to Galleon. That person is not Gupta. It’s David Loeb.

Loeb is now being investigated by the Feds.

Loeb, who called Rajaratnam “Big Daddy”, called him several times on the same days that Gupta did.

Loeb passed information about Intel Corp. and Apple Inc. to Rajaratnam, according to excerpts of two phone calls tapped by the Federal Bureau of Investigation and submitted by Gupta’s lawyers. The defense obtained the documents after Rakoff ordered the government to turn over all evidence of other Goldman Sachs tippers relied on by Rajaratnam.

The Manhattan jury weighing the charges against Gupta, a former Goldman Sachs director accused of tipping Rajaratnam, never heard that evidence during his trial. U.S. District Judge Jed Rakoff ruled that the phone calls and e-mails were inadmissible hearsay. The defense rested today and the jury may start deliberations late tomorrow afternoon.

At a hearing yesterday, David Frankel, an attorney for Gupta, told Rakoff the evidence about Loeb was “crucial” to the defense and proved “that another person committed an act of which the defendant stands accused.”

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/12/bloomberg_articlesM5IU2V1A74E901-M5IYA.DTL#ixzz1xhh7mRTf

The tapes of Loeb also go directly to showing that there was a culture of leaking at Goldman, which means Rajaratnam, besides being an important client of Goldman’s, had access to many other sources for tips.

He didn’t need Gupta to get leaks from Goldman insiders.

(TO BE CONTINUED)

Former Goldman Sachs Group Inc board member Rajat Gupta was convicted on Friday on criminal charges of illegally tipping his hedge fund manager friend Raj Rajaratnam with corporate secrets.

A federal court jury in Manhattan found Gupta guilty of three counts of securities fraud and one count of conspiracy, ending the four-week-long trial. He was found not guilty on two other securities fraud charges.

The jury delivered the verdict on the second day of its deliberations

Andrew Napolitano:

“The president is evading federal law on the use of the military by having the now-paramilitary CIA kill people in foreign countries with drones and disrupt a foreign population with a cyber-war. And he is violating the Constitution and federal law by starting wars on his own. But the loudest and most sanctimonious of politicians are not demanding that the president follow the Constitution and the laws he has sworn to uphold. Rather, they are demanding to know who told the media about the president’s war making.

Which is ultimately more harmful to freedom: that the president on his own kills and maims and destroys, or that some people in our own government who have greater fidelity to the Constitution than loyalty to an out-of-control presidency – and who are protected by law when they reveal government crimes – tell us what the president is up to? What kind of politicians complain about truthful revelations of unconstitutional behavior by the government, but not about death and destruction, and, let’s face it, criminal abuse of power by the president? Only cynical power-hungry politicians who have disdain for the Constitution they have sworn to uphold could do this with a straight face.

The president’s use of drones and cyber-warfare to kill people and to destabilize a foreign population, without a formal declaration of war, is the moral equivalent of an illegal war. When President Nixon started a war on his own in Cambodia, Congress enacted legislation over his veto to prevent that from happening again. Yet, the members of Congress who are demanding to know who told the truth to the media about President Obama’s war making apparently agree with his unlawful use of the war-making power he has stolen from them.”

Mark Twain, on the trials of Joan of Arc:

“Throughout the Trials, whatever the foredoomed witness said was twisted from its true meaning when possible, and made to tell against her; and whenever an answer of hers was beyond the reach of twisting it was not allowed to go upon the record. It was upon one of these latter occasions that she uttered that pathetic reproach — to Cauchon: “Ah, you set down everything that is against me, but you will not set down what is for me.”

That this untrained young creature’s genius for war was wonderful, and her generalship worthy to rank with the ripe products of a tried and trained military experience, we have the sworn testimony of two of her veteran subordinates — one, the Duc d’Alençon, the other the greatest of the French generals of the time, Dunois, Bastard of Orleans; that her genius was as great — possibly even greater — in the subtle warfare of the forum we have for witness the records of the Rouen Trials, that protracted exhibition of intellectual fence maintained with credit against the master-minds of France; that her moral greatness was peer to her intellect we call the Rouen Trials again to witness, with their testimony to a fortitude which patiently and steadfastly endured during twelve weeks the wasting forces of captivity, chains, loneliness, sickness, darkness, hunger, thirst, cold, shame, insult, abuse, broken sleep, treachery, ingratitude, exhausting sieges of cross-examination, the threat of torture, with the rack before her and the executioner standing ready: yet never surrendering, never asking quarter, the frail wreck of her as unconquerable the last day as was her invincible spirit the first.

Great as she was in so many ways, she was perhaps even greatest of all in the lofty things just named — her patient endurance, her steadfastness, her granite fortitude. We may not hope to easily find her mate and twin in these majestic qualities; where we lift our eyes highest we find only a strange and curious contrast — there in the captive eagle beating his broken wings on the Rock of Saint Helena.

III

The Trials ended with her condemnation. But as she had conceded nothing, confessed nothing, this was victory for her, defeat for Cauchon. But his evil resources were not yet exhausted. She was persuaded to agree to sign a paper of slight import, then by treachery a paper was substituted which contained a recantation and a detailed confession of everything which had been charged against her during the Trials and denied and repudiated by her persistently during the three months; and this false paper she ignorantly signed.

This was a victory for Cauchon. He followed it eagerly and pitilessly up by at once setting a trap for her which she could not escape. When she realized this she gave up the long struggle, denounced the treason which had been practiced against her, repudiated the false confession, reasserted the truth of the testimony which she had given in the Trials, and went to her martyrdom with the peace of God in her tired heart, and on her lips endearing words and loving prayers for the cur she had crowned and the nation of ingrates she had saved.

When the fires rose about her and she begged for a cross for her dying lips to kiss, it was not a friend but an enemy, not a Frenchman but an alien, not a comrade in arms but an English soldier, that answered that pathetic prayer. He broke a stick across his knee, bound the pieces together in the form of the symbol she so loved, and gave it her; and his gentle deed is not forgotten, nor will be.”

Comment

This is Twain’s description of the betrayal of Joan of Arc, from a book on which he labored for years. He considered it his magnum opus. I posted the piece..which I find endlessly inspiring… to suggest that change doesn’t come about by numbers – this is the corporatist-communist approach.

It comes about qualitatively, spiritually.

The mass following will come automatically when the moral force and the vision come into being. For that, you need only one person, really.

And that person can be utterly defeated, yet change will come.

Because  the world is made by thought-force…soul-force…. as Gandhi called it.

So it’s an individual thing. A lonely thing, if you will If speeches and parades could have changed things, they would have. There have been enough of them. They won’t. The current system is guaranteed to do that. It’s set up to neutralize public protest, or to turn it into an occasion for repression.

So Ron Paul can be defeated and even neutralized….but whatever was real in his words…will survive on their own.

Lots of gaseous anger floating around at Rand Paul..and Ron..these days.

Fair enough.

Except don’t say someone “sold you” a bill of goods, without also adding you “bought” it.

I don’t know how anyone could fairly say that they were surprised by Rand Paul’s endorsement.

He’s never pretended to be anything other than a liberty-oriented Republican.  Can’t fault him for your own psychological projections.

So here goes – top ten dumb reasons to hate Ron and Rand Paul.

I

1. Ron Paul makes strange finger signs that look occult. He’s a Freemason and it’s an Illuminati plot.

1. Ron Paul might be a Freemason and the Illuminati are always plotting,  but that is neither here nor there. The question is whether he’s a globalist. He isn’t, at least, not on paper.

The next question is whether he’s fronting for the globalists in some deeper manner, by co-opting the opposition, either intentionally with devious intent (Webster Tarpley), or unintentionally or more or less reluctantly (I’m in this camp).

As for hand signs – practically anything you do with your hands can be twisted into occult symbolism by a clever picture.

Give it a break.

By the way, the word “occult” only means “hidden”. It does not mean “creepy sexually perverted rituals committed under the statue of an owl,” no matter how many times Alex Jones said it does.

Creepy, sexually perverted rituals committed under owls…or even by owls…are just that. They can be committed  by occultists, sure, but they can also be committed by Baptists and atheists.  Some people might think it’s a pretty creepy ritual to eat the flesh and drink the blood of a guy who was put to death two thousands years ago.

Try reading a book, say, by Francis Yates or Mircea Eliade or Ananda Coomaraswamy, or Manly Hall, before getting your ideas about the “occult” from Google.

The occult just refers to the wisdom or esoteric tradition of  the West. Most of it is remarkably similar to Eastern religions like Hinduism. Jesus Christ was, in many ways, an “occultist.”

II

2. Rand Paul sold us out by endorsing Mitt Romney.

2. Rand Paul always showed he was sympathetic to Mitt Romney by every gesture and word. If you didn’t see that, consider LASIK, but don’t upchuck all over the forums.

Credulity isn’t something to be put on your resume.

Rand Paul’s Republican tendencies actually gave me some hope for him as a politician, although personally I don’t think politics is the arena in which real – as opposed to superficial – change takes place at all. So all the angst is redundant. Be sorry for wasting so much time and energy on a political campaign you apparently mistook for the return of Merlin…but that might not be entirely Rand Paul’s fault, eh?

Time to check the mirror.

III

3.  Ron Paul was only feathering his nest and setting up Rand for a political career.

3. Your point? If Ron Paul were as much as a saint as his supporters wanted him to be, he wouldn’t be in politics at all. He’d be in a monastery or a cabin in the woods.

He’s not only a politician, he’s a successful long-lived politician, who has many friends all over the place, made good money, and sold a bunch of books on the strength of his public visibility. This is not a bad thing in my book, but it kind of argues against him being a Trappist monk. He’s more of the “doing good by doing well” school

(see Rajat Gupta and public-private partnership for a more mainstream corporate version).

Look, libertarians believe that self-interest is a great and productive instinct in man. How could you expect their hero to be martyr material? He’s not. And I’m sure he doesn’t want to be. That may be a failing in libertarianism, but don’t blame Paul for not alerting you. It’s practically tattooed on his forehead.

IV

4. Ron Paul is a goldbug shilling for a gold standard that will support the bankers.

4. Ron Paul is a gold bug, Ron Paul is shilling, Ron Paul is for the gold standard, and Ron Paul is supporting the banksters are four separate propositions that have no necessary connection between them and need to be proved independently.

The sooner you figure that out, the sooner you will upgrade from ‘unpleasant internet bot’ to ‘rational thinker who can argue a point without having an epileptic fit.’

V

5.  The Ron Paul movement is dead, and now there’s no hope for liberty in the world.

5. This has to be the most annoying bit of narcissism I’ve come across.  There are more than a hundred other countries in the world, and several billion people, most of whom don’t speak English and have never heard of Ron Paul. Some of them have never heard of America. Amazing, huh? They’re all seeking liberty in their lives in different ways.  More than one of them is likely to do more for liberty than Ron Paul has. That’s not a slap at Ron Paul, who’s done a lot. It’s a slap at a very insular way of thinking.  You don’t Co-Chair The Committee on Global Liberty with the seraphim and cherubim. You really, really don’t.

VI

6.  The globalists can’t be stopped. it’s all the fault of Ron and Rand Paul. If they’d only….

6.  The globalists probably can’t be stopped overnight by anyone. Not even by God (see, Free Will).  For overnight instantaneous transformations of thoughts into matter, you need more than a different political campaign. You need a different planetary vibration (see, Occult).

VII

7. Webster Tarpley said, Alex Jones said, Eric Dondero said, Mark Ames said, Jesse Benton said…..

7. It’s OK to read and discuss what anyone with a big net presence has said about Ron Paul. But none of it is the last word.  We’re  not likely to know all the facts about why some public figure said or did something, so drawing too many conclusions too, well, conclusively, isn’t smart.

All of these people also have their own agendas and viewpoints.  Don’t make a decision about gold or paper money, based on “it will profit the globalists.”

Rest assured the globalists have a million ways to profit from any economic regime…..paper or gold or cowrie-shell.

Make up your mind about whether you want to buy or sell gold or buy currencies or anything else based on your own research into fundamental and technical factors, not playing off the binary

Gold=Good/Paper=Bad…

or

Paper=Good/Gold=Bad

VIII

8. Mitt Romney is EVIL EVIL EVIL. Anyone who supports him is EVIL EVIL EVIL. Barack Obama is EVIL EVIL EVIL. Anyone who supports him is EVIL EVIL EVIL.

8. Projecting absolute evil onto a political figure, a political position, or anything else is a flawed way of thinking.  Human beings pursue what they consider good. That “good” might in reality cause a lot of harm and damage to millions of lives, but that still doesn’t alter the fact that the person doing the damage is usually doing it in the pursuit of what he considers good. Understand that and don’t create demons where none exist. Romney is wrong when he does x,y, and z, and I would prefer that he did a, b, and c,  is much more persuasive than Romney (or Obama) is evil.

IX

9.  Ron Paul has made me lose interest in politics. What a jerk.

9. Actually, this is probably the brightest part of the whole story. The more people lose interest in politics, the better.  Not the wrong kind of  losing interest that makes you gullible and easy to manipulate. But the right kind. When you don’t waste time looking for political (mass) solutions but try to figure out smaller, local problems.  Instead of voting for Ron or Rand, try changing one municipal ordinance you hate.

X

10. Ron Paul wasn’t straight with us. He’s a fraud and a con.

10.  Ron Paul, buddy, has no obligation whatsoever to be straight with you. Did he marry you and swear to stick with you through rich or poor?

Ron Paul is obligated to follow the law, especially the constitution, and the and any appropriate limitations imposed by our intelligence services.  You might not like that. But those are his only legal obligations.

Ron Paul also has a media presence. If he wants to keep it, he CANNOT be straight about anything and everything.

If he were, he’d be gone tomorrow and writing a blog.

Which isn’t a bad thing, from my point of view, but all you guys who love cute Ron Paul T-shirts and mugs, crowds, tents, group “highs,” clever slogans, and plenty of traffic, will simply hate it.

Ron Paul gave all of that to you, just as surely as you gave all your energy and money and time to him.

It was a voluntary capitalist exchange, which is just what he stands for.

He didn’t promise you you’d win a million bucks, make the Superbowl, score a hot chick, or grow back all your hair.

He didn’t even promise to be president or hate Mitt Romney forever.

Yeah, you feel he let you down.

Smoke a cigarette.

Feelings don’t produce obligations.

You had a good ride and he did too.  Take it gracefully.

Whatever else he is, was, or might have been, Ron Paul was a graceful and gracious man.

Leave it at that.

Scam charities, like Bernie Madoff? No problem. The SEC and the FBI will look the other way…just like they did for years, while Madoff ran a ponzi scheme under their noses.

Scam the tax-payers, like Citi, Goldman, AIG, Solyndra? No problem. Here, take some more from them.

Scam the mom-and-pops, like MF Global, Citi, Countrywide?

So what? Someone’s gotta keep the suckers down.

But hey, front run Goldman Sachs and its pals, like Raj Rajaratnam and allegedly Rajat Gupta,  now we’re talking jail time.

Rajat Gupta might be guilty…or innocent…of insider-trading.

But this trial isn’t really about insider-trading. In case you didn’t notice, insider trading is Goldman Sachs’ business model.