Goldman's Blankfein to Testify at Galleon Insider-Trading Trial


Goldman Sachs Group (NYSE:GS) Chief Executive Lloyd Blankfein has agreed to testify for the U.S. government at the upcoming trial of Galleon hedge fund founder Raj Rajaratnam, the Wall Street Journal reported, citing people familiar with the matter.

The criminal trial of the Sri Lankan-born Rajaratnam, 53, is scheduled to start on March 8 in Manhattan federal court, part of what U.S. prosecutors call the biggest probe of insider trading at hedge funds.

The long-running case took a new turn two days ago when the U.S. Securities and Exchange Commission charged former Goldman director Rajat Gupta with providing inside information to Rajaratnam. Gupta called the charges baseless.

The U.S. government would use Blankfein to establish evidence linking information about Goldman that was shared among board members and executives with Gupta, the Journal said.

Blankfein's testimony would be used as a bridge establishing the origin of the tip allegedly provided by Gupta to Rajaratnam, who the government says traded on the information, the paper said.

Goldman representatives were not immediately available for comment outside U.S. business hours.