Presumably, the prosecution reasons that it is powerful evidence to hear Goldman’s CEO confirm that the phone call “violate[s] Goldman Sachs’ confidentiality policy.” Bad decision.
Today federal prosecutors called Goldman Sachs CEO Lloyd Blankfein to the stand to testify against Raj Rajaratnam, in what is being called the insider trading case of the century. As a former federal prosecutor, I have previously commented on the outlook of the case, the government’s strategy for prosecution, and the first round of testimony. Today, I express my doubts about the wisdom of calling Goldman’s CEO to the stand.
What you want the jury focused on is the substance and atmosphere of the taped conversation between Gupta and Rajaratnam. The chronology is right out of the movies. Gupta, a respected Goldman Board member, immediately upon leaving the Board Room, passes along highly confidential knowledge of Goldman’s acquisition plans to Raj. Federal prosecutors use Blankfein’s testimony to confirm that the information in the call was confidential, and thus was illegally communicated and obtained by Rajaratnam. Presumably, the prosecution reasons that it is powerful evidence to hear Goldman’s CEO confirm that the phone call “violate[s] Goldman Sachs’ confidentiality policy.”
Bad decision. The glare of the jury’s scrutiny and hopefully its wrath must remain on Raj. A high-profile witness, however, has the potential to distract and confuse the jury. Never underestimate the imagination of a jury, particularly one involved in a long trial. They will ponder the littlest of details and conjure up all kinds of theories. You don’t want that, particularly in a case this important. Sure, it looks powerful to call the CEO of Goldman to the stand, but isn’t that using a sledgehammer to crack a nut? Any senior executive or compliance officer could have made the same point. Drawing attention to the content of the illegal conversation rather than the person giving the testimony should have been priority one.
Put it this way: if Goldman Internal Compliance Officer John Doe had testified instead of CEO Blankfein, the New York Times’ headline could have been: Secret Tape Records Gupta’s Guilty Call; instead it was: Blankfein: Gupta Broke Confidentiality. Doesn’t the first suggestion focus a bit more on the point? Yet with the company CEO testifying you can bet the jury’s mind was in the same place as the Times’. Who knows what they will make of it, and if the defense is smart they will try to exploit the Blankfein appearance with seeds of conspiracy and anything that may divert the jury from the acts of Raj.
Assisted by David Martin