1
00:00:03,520 --> 00:00:07,040
Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

2
00:00:07,120 --> 00:00:09,680
Speaker 1: day we bring you inside an analysis into the most

3
00:00:09,720 --> 00:00:12,200
Speaker 1: important legal news of the day. You can find more

4
00:00:12,240 --> 00:00:16,160
Speaker 1: episodes of the Bloomberg Law Podcast on Apple podcast, SoundCloud

5
00:00:16,280 --> 00:00:20,160
Speaker 1: and on Bloomberg dot com slash podcast. Rajatte Gupta was

6
00:00:20,239 --> 00:00:22,840
Speaker 1: part of the global business elite, the head of Mackenzie,

7
00:00:22,880 --> 00:00:26,400
Speaker 1: a board member of Goldman Sachs, American Airlines, Procter and Gamble,

8
00:00:26,520 --> 00:00:29,600
Speaker 1: and a philanthropist. But then in twelve he was convicted

9
00:00:29,600 --> 00:00:33,040
Speaker 1: of insider trading. He exhausted all his appeals and served

10
00:00:33,040 --> 00:00:35,600
Speaker 1: two years in prison. Now he's written a book about

11
00:00:35,640 --> 00:00:39,800
Speaker 1: his rise and fall entitled Rajatte Kupta Mind Without Fear,

12
00:00:39,840 --> 00:00:41,640
Speaker 1: And he joins me now in our New York studio,

13
00:00:41,680 --> 00:00:44,560
Speaker 1: Thanks for coming in. Thank you. You write that since

14
00:00:44,600 --> 00:00:48,680
Speaker 1: your parents death, you let a charmed life before the trial.

15
00:00:49,000 --> 00:00:51,000
Speaker 1: Tell me a little about what you meant by that.

16
00:00:51,720 --> 00:00:55,520
Speaker 1: What I meant by that is that, you know, I

17
00:00:55,520 --> 00:00:58,760
Speaker 1: went to one of the best schools in India in

18
00:00:59,000 --> 00:01:01,560
Speaker 1: the Suit of Technology, which is a great engineering school.

19
00:01:02,240 --> 00:01:04,520
Speaker 1: I had the opportunity to go to Harvard Business School

20
00:01:05,560 --> 00:01:09,880
Speaker 1: on full financial aid. You know, then I got my

21
00:01:10,000 --> 00:01:14,040
Speaker 1: dream job at McKenzie and Company, and I spent thirty

22
00:01:14,040 --> 00:01:18,920
Speaker 1: seven years there. I was an unlikely choice, but I

23
00:01:18,959 --> 00:01:24,399
Speaker 1: became the head of McKenzie yet and I had a

24
00:01:24,440 --> 00:01:28,959
Speaker 1: wonderful nine years leading the firm. And then I became

25
00:01:29,760 --> 00:01:35,000
Speaker 1: much more engaged in broader societal issues and global health

26
00:01:35,040 --> 00:01:40,080
Speaker 1: and education and philanthropy in many different ways. So I

27
00:01:40,120 --> 00:01:43,080
Speaker 1: felt I was leading a very productive and in a

28
00:01:43,120 --> 00:01:46,760
Speaker 1: way charmed life. I mean, uh, did all this happened?

29
00:01:48,200 --> 00:01:51,280
Speaker 1: So do you think you should have retired and maybe

30
00:01:51,280 --> 00:01:53,440
Speaker 1: this would never have happened. What do you look at

31
00:01:53,720 --> 00:01:56,920
Speaker 1: as a regret in your life? Well, there are many

32
00:01:56,960 --> 00:02:00,560
Speaker 1: small regrets in this thing. This this thing happened when

33
00:02:00,560 --> 00:02:05,640
Speaker 1: a lot of circumstances confluence. I mean, this is the

34
00:02:05,680 --> 00:02:08,480
Speaker 1: simplest one is I had resigned from the government board

35
00:02:08,560 --> 00:02:13,120
Speaker 1: in two thousand and eight, and the designation was accepted,

36
00:02:13,240 --> 00:02:17,240
Speaker 1: the press release was drafted, and it was going to

37
00:02:17,280 --> 00:02:21,680
Speaker 1: go out, and then they turned around and said, no, no,

38
00:02:21,720 --> 00:02:25,280
Speaker 1: please don't resign now because Lehman was going bankrupt and

39
00:02:25,320 --> 00:02:29,120
Speaker 1: so on, said we don't want people to think one

40
00:02:29,160 --> 00:02:32,280
Speaker 1: of our board members is resigning, and so on. And

41
00:02:32,560 --> 00:02:35,760
Speaker 1: if I had stuck with my decision to resign, none

42
00:02:35,760 --> 00:02:39,400
Speaker 1: of this would have happened. So there is an element

43
00:02:39,480 --> 00:02:44,000
Speaker 1: of destiny in all this. You know, I had retired

44
00:02:44,040 --> 00:02:46,840
Speaker 1: from the firm, I was more spending more than half

45
00:02:46,880 --> 00:02:51,519
Speaker 1: my time in philanthropic endeavors anyway, so also destiny. Raj

46
00:02:51,639 --> 00:02:55,040
Speaker 1: Raj Ratnam. Meeting him, how would you describe Raj Raja Ratnam?

47
00:02:55,919 --> 00:02:58,079
Speaker 1: I would say he was you know, now there is

48
00:02:58,120 --> 00:03:01,120
Speaker 1: a lot of revisionist history, but in those days, he

49
00:03:01,280 --> 00:03:05,800
Speaker 1: was an extraordinary success in Wall Street. He was considered

50
00:03:05,840 --> 00:03:10,280
Speaker 1: to be a very smart, very bright trader. Before I

51
00:03:10,360 --> 00:03:13,919
Speaker 1: invested with him, I actually checked with Hank Polson, who

52
00:03:14,040 --> 00:03:18,359
Speaker 1: was a very dear friend for many many years, and

53
00:03:18,440 --> 00:03:21,760
Speaker 1: Garry Corn and they came up with flying you know,

54
00:03:22,240 --> 00:03:27,200
Speaker 1: recommendations for Rod, saying he's very bright and I had

55
00:03:27,280 --> 00:03:30,480
Speaker 1: seen his philanthropic side. Also, he was a big donor

56
00:03:30,520 --> 00:03:33,359
Speaker 1: to the Indian School of Business. So I had a

57
00:03:33,440 --> 00:03:36,280
Speaker 1: very good opinion of him just before I knew him

58
00:03:36,400 --> 00:03:40,320
Speaker 1: by reputation, and he was a very smart guy. If

59
00:03:40,320 --> 00:03:42,880
Speaker 1: you could change one thing about your relationship with him,

60
00:03:42,880 --> 00:03:45,920
Speaker 1: what would it be? It would be that I wouldn't

61
00:03:46,040 --> 00:03:50,640
Speaker 1: so fully trust him. You know, I invested ten million

62
00:03:50,640 --> 00:03:53,480
Speaker 1: dollars with him without a signature. I mean, I didn't

63
00:03:53,520 --> 00:03:57,320
Speaker 1: even have the I thought he was a very trustworthy

64
00:03:57,320 --> 00:04:01,360
Speaker 1: guy and anyway, he was very rich. Why would he

65
00:04:01,640 --> 00:04:07,280
Speaker 1: do anything out of the ordinary for me? You know? So, yeah,

66
00:04:07,520 --> 00:04:09,960
Speaker 1: I would. I would change that and said, okay, we

67
00:04:10,000 --> 00:04:12,880
Speaker 1: are co signed as we here owned I own to

68
00:04:12,920 --> 00:04:16,960
Speaker 1: any percent. I said, fine, but you know some control now.

69
00:04:17,160 --> 00:04:19,760
Speaker 1: I want to go to the time of the trial.

70
00:04:20,080 --> 00:04:23,480
Speaker 1: There are a few key pieces of evidence, one being

71
00:04:23,600 --> 00:04:26,359
Speaker 1: a wire tap of a conversation you had with Roger

72
00:04:26,440 --> 00:04:30,279
Speaker 1: Rottenham where you confirmed a rumor that Goldman might buy

73
00:04:30,279 --> 00:04:35,160
Speaker 1: a commercial bank. The prosecutors call that a tip. What Firstly,

74
00:04:35,600 --> 00:04:38,680
Speaker 1: it was not any insider information in the sense it

75
00:04:38,720 --> 00:04:42,440
Speaker 1: was not market moving information. It was not even confidential information.

76
00:04:42,880 --> 00:04:46,400
Speaker 1: The market already knew about it. Goldman Sachs executives themselves

77
00:04:46,800 --> 00:04:49,920
Speaker 1: talked to the market about it. It was a conversation

78
00:04:50,120 --> 00:04:53,960
Speaker 1: that was had at a board meeting a month before

79
00:04:54,760 --> 00:04:59,880
Speaker 1: that recording, and uh, there was no no, no tra

80
00:05:00,000 --> 00:05:02,920
Speaker 1: eating based on that. So it was like, you know,

81
00:05:03,240 --> 00:05:07,720
Speaker 1: this was well known information. Okay. The context of it

82
00:05:07,760 --> 00:05:11,120
Speaker 1: was a board meeting where if you remember those times,

83
00:05:11,360 --> 00:05:15,200
Speaker 1: basically there was discussion always about who should merge with whom,

84
00:05:15,240 --> 00:05:17,240
Speaker 1: and there were companies in trouble and so on and and

85
00:05:17,320 --> 00:05:19,960
Speaker 1: so forth. And we had a strategy discussion at the

86
00:05:19,960 --> 00:05:24,200
Speaker 1: board where there was every candidate discussed should Goldman you know,

87
00:05:24,320 --> 00:05:28,040
Speaker 1: acquire some know, a whole bunch of different candidates, or

88
00:05:28,080 --> 00:05:31,840
Speaker 1: they should merge with somebody, etcetera. And this was information

89
00:05:31,920 --> 00:05:37,080
Speaker 1: that the Goldman executives conveyed to the marketplace. And the

90
00:05:37,160 --> 00:05:41,039
Speaker 1: context of this conversation was that Raja Ratnam was having

91
00:05:41,200 --> 00:05:44,640
Speaker 1: a meeting with Gary Kohen, who was the president of Goldman.

92
00:05:45,480 --> 00:05:47,799
Speaker 1: Raja Ratnam was one of the biggest clients of Goldman

93
00:05:48,200 --> 00:05:52,880
Speaker 1: had prime brokerage accounts, okay. I was trying to make

94
00:05:52,920 --> 00:05:56,200
Speaker 1: sure that. I always used to tell rag Goldman is

95
00:05:56,240 --> 00:06:00,719
Speaker 1: an extraordinary, outstanding institution, because he was worried about everybody

96
00:06:00,720 --> 00:06:02,279
Speaker 1: going bankrupt and he was going to move his money

97
00:06:02,360 --> 00:06:05,040
Speaker 1: to Europe the prime brokeray accounts. I said, no, don't

98
00:06:05,040 --> 00:06:07,120
Speaker 1: do that. Goldman will be the last bank standing there,

99
00:06:07,200 --> 00:06:10,440
Speaker 1: the smartest PEC And so this was to kind of

100
00:06:10,960 --> 00:06:13,800
Speaker 1: prepare him. He called me by the I didn't call him,

101
00:06:13,839 --> 00:06:15,360
Speaker 1: so it wasn't like I was trying to give him

102
00:06:15,400 --> 00:06:17,440
Speaker 1: a tip. He called me said I'm having a meeting

103
00:06:17,480 --> 00:06:21,200
Speaker 1: with Gary Kohen tomorrow. Can you tell me? And he said,

104
00:06:21,240 --> 00:06:25,400
Speaker 1: I heard Goldman is going to you know, thinking of

105
00:06:26,040 --> 00:06:29,239
Speaker 1: It's like everybody was thinking of merging with everybody else.

106
00:06:29,880 --> 00:06:33,280
Speaker 1: And it was not confidential information. Even if you weren't

107
00:06:33,279 --> 00:06:35,880
Speaker 1: trying to give him information, was he trying to get information?

108
00:06:35,920 --> 00:06:38,440
Speaker 1: Not in that instance, because he was really preparing for

109
00:06:38,480 --> 00:06:41,120
Speaker 1: a meeting with Gary Cole. He was wanted to be,

110
00:06:41,760 --> 00:06:45,200
Speaker 1: you know, a pay smart with Gary, and and Gary

111
00:06:45,480 --> 00:06:47,239
Speaker 1: wanted to make sure he kept him as a client.

112
00:06:47,800 --> 00:06:50,400
Speaker 1: So as a Goldman board member, I should there's a

113
00:06:50,440 --> 00:06:53,040
Speaker 1: big client, I should make sure that he and Goldman

114
00:06:53,080 --> 00:06:56,240
Speaker 1: get along with Let's go to the piece of testimony

115
00:06:56,279 --> 00:06:59,880
Speaker 1: which might be the biggest piece of evidence against you.

116
00:07:00,120 --> 00:07:02,760
Speaker 1: There was testimony that you call Raja Rottenham's office right

117
00:07:02,800 --> 00:07:07,640
Speaker 1: before the market closed on September sixteen, seconds after the

118
00:07:07,680 --> 00:07:11,160
Speaker 1: Goldman board discussed Warren Buffett investing in the company, which

119
00:07:11,160 --> 00:07:13,840
Speaker 1: was big news, and it led to frantic calls in

120
00:07:13,960 --> 00:07:18,239
Speaker 1: Raja Rottenham's office to sell Goldman stock. Do you remember

121
00:07:18,240 --> 00:07:22,520
Speaker 1: that call. I don't remember actually talking to him, but

122
00:07:22,720 --> 00:07:26,280
Speaker 1: I can give you the context which I don't think

123
00:07:26,520 --> 00:07:29,240
Speaker 1: came out at the trial, nor will the prosecutors accepted.

124
00:07:29,720 --> 00:07:32,200
Speaker 1: In the morning, I called Raj Ratnam because by that

125
00:07:32,280 --> 00:07:34,640
Speaker 1: time we had a falling out and he had taken

126
00:07:34,640 --> 00:07:36,920
Speaker 1: out some money in the investment we had made, and

127
00:07:36,960 --> 00:07:40,240
Speaker 1: I've been trying to get some documents from him. Well,

128
00:07:40,240 --> 00:07:43,080
Speaker 1: he kept promising the documents but will never deliver. And

129
00:07:43,160 --> 00:07:45,280
Speaker 1: that morning I called him and said, my bankers need

130
00:07:45,320 --> 00:07:49,320
Speaker 1: these documents. Please send it to my office today at

131
00:07:49,880 --> 00:07:54,880
Speaker 1: you know, four or whatever, just before the board meaning finished.

132
00:07:55,360 --> 00:07:58,240
Speaker 1: I called my secretary, not him. I called my secretary

133
00:07:58,320 --> 00:08:01,320
Speaker 1: and said, as rather Ratnam sent the documents, and she

134
00:08:01,360 --> 00:08:04,560
Speaker 1: said no, I said, get me Rage. And I actually

135
00:08:04,600 --> 00:08:07,000
Speaker 1: don't remember whether I talked to Rage at that time

136
00:08:07,080 --> 00:08:10,560
Speaker 1: or not. It was a very short call. I may

137
00:08:10,640 --> 00:08:12,880
Speaker 1: have talked to him or may not have talked to him,

138
00:08:12,920 --> 00:08:16,280
Speaker 1: but I do remember in the records seeing that at

139
00:08:16,280 --> 00:08:20,680
Speaker 1: six o'clock I at called Rage to say I need

140
00:08:20,720 --> 00:08:22,680
Speaker 1: to catch up with you. So that leads me to

141
00:08:22,760 --> 00:08:25,680
Speaker 1: believe maybe we never talked because the call it was

142
00:08:25,720 --> 00:08:27,960
Speaker 1: not recorded, but there was a call. Duration was thirty

143
00:08:28,040 --> 00:08:31,160
Speaker 1: nine seconds or something. So I called my secretary. My

144
00:08:31,240 --> 00:08:34,040
Speaker 1: secretary called his secretary. I don't know whether I actually

145
00:08:34,040 --> 00:08:36,559
Speaker 1: talked to him. But another thing you've got to remember

146
00:08:36,679 --> 00:08:41,280
Speaker 1: is that the Goldman stock started moving up from one

147
00:08:41,280 --> 00:08:44,480
Speaker 1: o'clock onwards. One o'clock was the time when the board

148
00:08:44,520 --> 00:08:48,120
Speaker 1: meeting was scheduled. So obviously, you know it was known

149
00:08:48,160 --> 00:08:51,600
Speaker 1: in the marketplace somewhere that there was extraordinary board meeting happening.

150
00:08:52,440 --> 00:08:55,680
Speaker 1: And you know he must have been watching the tape.

151
00:08:55,480 --> 00:08:59,040
Speaker 1: I have no idea where he got the information from,

152
00:08:59,080 --> 00:09:03,719
Speaker 1: but certainly certainly not me. So the jury didn't get

153
00:09:03,760 --> 00:09:06,880
Speaker 1: to hear your full explanation for this because you didn't

154
00:09:06,920 --> 00:09:09,960
Speaker 1: take the stand. Why didn't you take the stand? Well,

155
00:09:10,040 --> 00:09:12,839
Speaker 1: it's a complicated story because I've been trying to reconstruct

156
00:09:12,840 --> 00:09:15,160
Speaker 1: in my mind, my state of mind. I I wanted

157
00:09:15,160 --> 00:09:18,520
Speaker 1: to testify. I always maintained I wanted to testify, and

158
00:09:18,559 --> 00:09:20,520
Speaker 1: I was telling my lawyers all the time, We told

159
00:09:20,520 --> 00:09:23,559
Speaker 1: the court I was going to testify. The trial went on,

160
00:09:23,720 --> 00:09:27,800
Speaker 1: and my lawyers were always against it and just weren't

161
00:09:27,840 --> 00:09:30,680
Speaker 1: preparing me for the testimony. I would have thought I

162
00:09:30,720 --> 00:09:34,040
Speaker 1: would be the most important witness. They should prepare me,

163
00:09:34,240 --> 00:09:36,920
Speaker 1: They should prepare me for the cross examination that would come.

164
00:09:36,960 --> 00:09:41,120
Speaker 1: And so on, but no trial dragged on the government

165
00:09:41,679 --> 00:09:44,920
Speaker 1: took three whole weeks, and I thought the trial wasn't

166
00:09:44,960 --> 00:09:48,760
Speaker 1: going well. The judge was ruling against us. The prosecution

167
00:09:49,360 --> 00:09:53,839
Speaker 1: was continuously harping on a false narrative all the time,

168
00:09:54,440 --> 00:09:56,600
Speaker 1: because in inside of trading, you've got to show that

169
00:09:56,679 --> 00:10:00,439
Speaker 1: actual information was passed inside and information, that there was

170
00:10:00,520 --> 00:10:03,840
Speaker 1: real benefit, and that there was criminal intent. And they

171
00:10:03,880 --> 00:10:07,199
Speaker 1: didn't have proof for anything other than some circumstantial evidence.

172
00:10:07,240 --> 00:10:10,080
Speaker 1: Regarding the first point, there had no proof of any benefit.

173
00:10:10,120 --> 00:10:15,319
Speaker 1: In fact, they acknowledged. However, they kept putting innuendo on it, saying, oh,

174
00:10:15,360 --> 00:10:18,040
Speaker 1: I owned fifteen percent of galle In International, et cetera.

175
00:10:18,800 --> 00:10:22,120
Speaker 1: Coming back to your original question. By three weeks, I

176
00:10:22,160 --> 00:10:25,319
Speaker 1: was feeling really dumb, and you know I had also

177
00:10:25,480 --> 00:10:28,679
Speaker 1: before the trial, I talked to Frank Quatrone. He said,

178
00:10:29,000 --> 00:10:31,560
Speaker 1: whatever you do, don't testify, because you know, listen to

179
00:10:31,559 --> 00:10:33,560
Speaker 1: your lawyers. I didn't listen to mine. I lost my

180
00:10:33,640 --> 00:10:36,679
Speaker 1: first trial. I listened to them second time. I wanted

181
00:10:36,800 --> 00:10:40,280
Speaker 1: so you know, I said, these are professionals. You know,

182
00:10:40,520 --> 00:10:43,680
Speaker 1: when I serve clients, you know, I expect them to

183
00:10:43,720 --> 00:10:46,280
Speaker 1: listen to me. So I that I should listen to

184
00:10:46,280 --> 00:10:49,120
Speaker 1: the lawyers, and by the way, it was a combination

185
00:10:49,160 --> 00:10:51,760
Speaker 1: of that. But I still I was very keen to testify,

186
00:10:51,880 --> 00:10:55,319
Speaker 1: but I was beaten down by that time. Now, when

187
00:10:55,360 --> 00:10:58,600
Speaker 1: the jury came back, they deliberated for about ten hours,

188
00:10:58,960 --> 00:11:00,920
Speaker 1: and when they came back, some of the jurors were

189
00:11:00,920 --> 00:11:05,079
Speaker 1: actually crying. So what did you feel when you heard

190
00:11:05,120 --> 00:11:09,160
Speaker 1: their verdict? You know that I think many members of

191
00:11:09,160 --> 00:11:12,360
Speaker 1: the jury did not want to convict me, but they

192
00:11:12,400 --> 00:11:16,160
Speaker 1: almost had no choice given the instructions that the judge gave,

193
00:11:16,960 --> 00:11:21,000
Speaker 1: which was quite bizarre. I mean, for example, he said, well,

194
00:11:21,040 --> 00:11:23,200
Speaker 1: the Bunnet benefit doesn't have to be anything real. It

195
00:11:23,200 --> 00:11:27,280
Speaker 1: could be just friendship. That doesn't make any real sense

196
00:11:27,360 --> 00:11:30,760
Speaker 1: in in law. But I guess that was the interpretation.

197
00:11:31,600 --> 00:11:34,160
Speaker 1: Or he said circumstantial evidence is just as good as

198
00:11:34,400 --> 00:11:39,280
Speaker 1: direct evidence, because they had no recordings that you know,

199
00:11:39,679 --> 00:11:42,920
Speaker 1: they recorded, rather than for eighteen months, there was not

200
00:11:43,000 --> 00:11:46,679
Speaker 1: a single recording my passing him any information. There were

201
00:11:46,679 --> 00:11:51,160
Speaker 1: no emails, there were no witnesses. So maybe I didn't

202
00:11:51,160 --> 00:11:53,520
Speaker 1: say anything or do anything. I mean, you know, it's

203
00:11:53,520 --> 00:11:56,720
Speaker 1: a bizarre thing. Where is the motive? I had boardroom

204
00:11:56,800 --> 00:12:00,120
Speaker 1: secrets with me for forty years There was never an

205
00:12:00,120 --> 00:12:04,040
Speaker 1: issue throughout my entire career. How is it that suddenly

206
00:12:04,080 --> 00:12:08,080
Speaker 1: I would think of another thing related to ratherthom case.

207
00:12:08,120 --> 00:12:10,880
Speaker 1: There were maybe twenty two convictions or something like that.

208
00:12:11,840 --> 00:12:16,240
Speaker 1: Every one of them had a quit proco, had an

209
00:12:16,320 --> 00:12:21,439
Speaker 1: arrangement with Raj and got specific benefit money or whatever. Right,

210
00:12:21,920 --> 00:12:24,600
Speaker 1: how is it that I'm the only informant of ISOs

211
00:12:24,679 --> 00:12:28,280
Speaker 1: no no arrangement. So what went through your mind when

212
00:12:28,280 --> 00:12:31,080
Speaker 1: you heard the jury verdict? I by that time was

213
00:12:32,120 --> 00:12:35,640
Speaker 1: resigned to the jury verdict. They acquitted me on two

214
00:12:35,640 --> 00:12:38,600
Speaker 1: of the charges, which were completely made up by the

215
00:12:38,640 --> 00:12:42,880
Speaker 1: prosecution added later on, had no even shread of evidence.

216
00:12:44,040 --> 00:12:46,880
Speaker 1: The jury asked the question, do we of the judge

217
00:12:46,880 --> 00:12:50,680
Speaker 1: when they were deliberating, or do we have to convict

218
00:12:50,760 --> 00:12:53,880
Speaker 1: him on conspiracy? And the judge replied, well, if there

219
00:12:53,960 --> 00:12:58,040
Speaker 1: is an instance, then you have to convict him of conspiracy,

220
00:12:58,040 --> 00:13:01,040
Speaker 1: which was bizarre because they looked at me and they said,

221
00:13:01,200 --> 00:13:04,400
Speaker 1: this guy couldn't have done it, but we can't find

222
00:13:04,480 --> 00:13:09,000
Speaker 1: him innocent. You're very critical of the judge, Judge jed Rakoff,

223
00:13:09,000 --> 00:13:11,520
Speaker 1: who was considered one of the best judges in the country.

224
00:13:11,840 --> 00:13:15,280
Speaker 1: You had one of the best defense attorneys Gary nft Talas.

225
00:13:15,320 --> 00:13:20,240
Speaker 1: But you're very critical of the legal system and the judges, rulings,

226
00:13:20,280 --> 00:13:22,920
Speaker 1: and the prosecution. Do you think you've got a fair trial.

227
00:13:24,040 --> 00:13:27,240
Speaker 1: I absolutely believe I did not get a fair trial. Um,

228
00:13:28,280 --> 00:13:31,959
Speaker 1: let me give you one or two instances. They kept

229
00:13:32,000 --> 00:13:36,520
Speaker 1: saying that I owned fifteen percent of Gallean International. This

230
00:13:36,559 --> 00:13:40,520
Speaker 1: is absolutely untrue, and they knew it because they looked

231
00:13:40,559 --> 00:13:44,320
Speaker 1: after it looked to do every all my financial accounts,

232
00:13:44,400 --> 00:13:48,040
Speaker 1: all my bank accounts, all my taxes, etcetera. They examined

233
00:13:48,080 --> 00:13:52,360
Speaker 1: all of Galleon's books, Galleans International books. The Gallean president

234
00:13:52,440 --> 00:13:57,199
Speaker 1: testified that I was not involved with Galleian International. Yet

235
00:13:57,280 --> 00:13:59,920
Speaker 1: they kept saying I owned fifteen percent of Gallean International.

236
00:14:01,320 --> 00:14:06,520
Speaker 1: I don't expect the government to lie bold faced in

237
00:14:06,559 --> 00:14:11,400
Speaker 1: the court. Okay. Then when I lost the trial. After that,

238
00:14:11,480 --> 00:14:15,200
Speaker 1: when appeal memos are fired and we demonstrated in the

239
00:14:15,240 --> 00:14:18,640
Speaker 1: trial that there was no ownership nothing, they still asserted

240
00:14:18,720 --> 00:14:21,200
Speaker 1: in the appeals memo saying that he owned that was

241
00:14:21,200 --> 00:14:26,720
Speaker 1: the benefit he owned of Gallean International. When I see that,

242
00:14:26,840 --> 00:14:29,480
Speaker 1: I said the prosecutors, this all about winning, It's not

243
00:14:29,560 --> 00:14:33,080
Speaker 1: about finding searching the truth. It's all about winning at

244
00:14:33,120 --> 00:14:37,040
Speaker 1: any cost. Did you feel that the judge's rulings were

245
00:14:37,080 --> 00:14:41,120
Speaker 1: deliberately against you. I don't know about deliberately. I I

246
00:14:41,160 --> 00:14:44,720
Speaker 1: don't want to you know. Let me give you another example.

247
00:14:45,320 --> 00:14:50,240
Speaker 1: Raj Rathna made another actual source inside Goldman. He was

248
00:14:51,520 --> 00:14:56,600
Speaker 1: recorded giving inside information to rather Ratham, not about government,

249
00:14:56,640 --> 00:15:01,400
Speaker 1: but about other companies. Two interesting observations. Judge Rakoff ruled

250
00:15:01,480 --> 00:15:04,000
Speaker 1: that he could not be allowed as a witness, and

251
00:15:04,040 --> 00:15:06,840
Speaker 1: there were phone calls from him on the same days

252
00:15:07,480 --> 00:15:11,040
Speaker 1: as my phone calls to rage. He had the phone calls.

253
00:15:11,120 --> 00:15:14,280
Speaker 1: He was an established source, and yet we cannot call

254
00:15:14,320 --> 00:15:16,440
Speaker 1: him as a witness. It didn't make any sense to us.

255
00:15:17,080 --> 00:15:20,360
Speaker 1: Then the prosecutors never pursued him. I mean, he has

256
00:15:20,360 --> 00:15:24,880
Speaker 1: a direct evidence of his giving inside information and they

257
00:15:24,880 --> 00:15:28,000
Speaker 1: did not pursue him. So you felt after the trial

258
00:15:28,160 --> 00:15:31,240
Speaker 1: was over that the whole process had been unfair to you. Yes,

259
00:15:31,560 --> 00:15:34,440
Speaker 1: what about the sentencing? Judge Rakoff was leaning with you

260
00:15:34,480 --> 00:15:36,720
Speaker 1: according to the guidelines. He gave you two years, he

261
00:15:36,760 --> 00:15:39,880
Speaker 1: could have given you eight to ten, and he read

262
00:15:40,160 --> 00:15:42,360
Speaker 1: every single one of the hundreds of letters that you

263
00:15:42,440 --> 00:15:45,640
Speaker 1: had sent. Did you feel that he was fair with

264
00:15:45,680 --> 00:15:50,640
Speaker 1: the sentencing. I think he was fair with the sentencing. Um,

265
00:15:50,640 --> 00:15:52,960
Speaker 1: he was very different than the sentencing. You know, he

266
00:15:53,760 --> 00:15:56,200
Speaker 1: started off by saying, of course that he had read

267
00:15:56,320 --> 00:15:59,440
Speaker 1: there were four hundred plus letters. He said in his

268
00:15:59,640 --> 00:16:03,600
Speaker 1: entire judicial career, he had never seen anyone with that

269
00:16:03,720 --> 00:16:09,360
Speaker 1: kind of support ever. So he was very taken by that,

270
00:16:09,480 --> 00:16:13,520
Speaker 1: I think, and he gave me a lighter sentence than

271
00:16:13,560 --> 00:16:17,880
Speaker 1: what he could have. UM. I very much appreciated that

272
00:16:18,440 --> 00:16:23,120
Speaker 1: from him, But that doesn't change how I was treated

273
00:16:23,120 --> 00:16:28,240
Speaker 1: at the trial. UM. Yes, I was very appreciative because

274
00:16:28,240 --> 00:16:31,240
Speaker 1: the two year sentence and a tennyear sentence are very different.

275
00:16:31,720 --> 00:16:34,240
Speaker 1: When you say treated at the trial, do you mean

276
00:16:34,280 --> 00:16:38,000
Speaker 1: the evidence that came in or were the prosecutors mean

277
00:16:38,080 --> 00:16:40,760
Speaker 1: to you in any respect? Because the chief prosecutor has

278
00:16:40,840 --> 00:16:42,400
Speaker 1: said that he had a lot of respect for you

279
00:16:42,440 --> 00:16:44,920
Speaker 1: as a person. No. No, I don't think they were

280
00:16:44,960 --> 00:16:47,600
Speaker 1: mean to me or anything. I I. What I'm saying

281
00:16:47,680 --> 00:16:50,160
Speaker 1: is that firstly, I should have never been charged. It

282
00:16:50,240 --> 00:16:57,000
Speaker 1: didn't have the evidence right. Second was that they constructed

283
00:16:57,040 --> 00:17:01,000
Speaker 1: a story and they used tactics, like I said, charging

284
00:17:01,040 --> 00:17:03,640
Speaker 1: me before our Datham's trial, so to create a public

285
00:17:04,160 --> 00:17:07,479
Speaker 1: they they fought the trial in the media, first at

286
00:17:07,520 --> 00:17:10,840
Speaker 1: ra Hathnams trial, then in the media. So by the

287
00:17:10,880 --> 00:17:13,800
Speaker 1: time my trial came around, I mean, the public opinion

288
00:17:14,000 --> 00:17:17,800
Speaker 1: was already against me. Let's turn a little bit to

289
00:17:18,080 --> 00:17:20,400
Speaker 1: pret Barrara, who was the U S attorney at the time.

290
00:17:20,880 --> 00:17:23,960
Speaker 1: You are very critical of pre Barrara in the book.

291
00:17:24,720 --> 00:17:29,240
Speaker 1: What's your take on him? I am. I am critical

292
00:17:29,280 --> 00:17:33,240
Speaker 1: of pre Barra, not just saying pre Barra, but I

293
00:17:33,280 --> 00:17:37,359
Speaker 1: think this is unfortunately one of the issues with the

294
00:17:37,440 --> 00:17:42,280
Speaker 1: justice system. The incentives are misaligned. Most of the prosecutors,

295
00:17:42,680 --> 00:17:45,760
Speaker 1: many of the prosecutors actions say, most are political animals.

296
00:17:45,800 --> 00:17:50,240
Speaker 1: They have political ambitions, and there you know, yard stick

297
00:17:50,280 --> 00:17:54,840
Speaker 1: of success is winds instead of truth. I'm critical of

298
00:17:55,560 --> 00:17:58,200
Speaker 1: Petra in the same extent as I had seen many

299
00:17:58,240 --> 00:18:01,640
Speaker 1: prosecutors do the same thing. Overreached. There was no evidence,

300
00:18:01,640 --> 00:18:06,000
Speaker 1: there was no case. Second, this was purely diversionary as

301
00:18:06,000 --> 00:18:08,639
Speaker 1: far as I can concern. The financial crisis, which was

302
00:18:08,680 --> 00:18:13,960
Speaker 1: a real crisis, you know, where thousands of thousands of

303
00:18:14,119 --> 00:18:17,760
Speaker 1: people on the main street lost jobs, lost their pension accounts,

304
00:18:18,200 --> 00:18:22,800
Speaker 1: lost everything, and all the prosecutor's office did is to

305
00:18:22,920 --> 00:18:27,320
Speaker 1: create fines for banks, which the shareholder is paid, the

306
00:18:27,359 --> 00:18:32,879
Speaker 1: executives kept all their bonuses and everything else, and their

307
00:18:32,960 --> 00:18:37,000
Speaker 1: banks all admitted wrongdoing and in fact even fraud, and

308
00:18:37,080 --> 00:18:41,760
Speaker 1: yet no management person was held accountable. No CEO was

309
00:18:41,800 --> 00:18:45,639
Speaker 1: held accountable. How can that be? And should he be

310
00:18:45,680 --> 00:18:49,280
Speaker 1: going after I'm not condoning headge fund inside of trading,

311
00:18:49,840 --> 00:18:53,720
Speaker 1: but but you know, I mean, look at this is

312
00:18:53,720 --> 00:18:57,560
Speaker 1: the biggest financial crisis the country has had in you know,

313
00:18:57,720 --> 00:19:00,760
Speaker 1: more than half a century, and yet we have not

314
00:19:00,960 --> 00:19:05,080
Speaker 1: brought anybody to real account. Your time in prison, you

315
00:19:05,160 --> 00:19:08,080
Speaker 1: seem to have used it. Well. You saw Roger Rottenham.

316
00:19:08,119 --> 00:19:11,080
Speaker 1: It's sort of bizarre that you saw him in prison.

317
00:19:11,480 --> 00:19:14,720
Speaker 1: Did he ever apologize to you? No, he didn't, But

318
00:19:14,800 --> 00:19:17,920
Speaker 1: because he's not apologizing type. I told him that you're

319
00:19:17,960 --> 00:19:20,240
Speaker 1: the reason I'm here, and he could have said sorry,

320
00:19:20,280 --> 00:19:22,919
Speaker 1: but he didn't. But I didn't, you know, he's not

321
00:19:23,000 --> 00:19:27,680
Speaker 1: the apologizing type. But I saw him there. I am

322
00:19:27,840 --> 00:19:30,800
Speaker 1: generally a very forgiving person. You know, he had a

323
00:19:30,800 --> 00:19:34,720
Speaker 1: long sentence, he was not looking particularly well. I have

324
00:19:34,760 --> 00:19:38,520
Speaker 1: a lot of empathy for him. Also, he you know,

325
00:19:39,080 --> 00:19:42,199
Speaker 1: was offered five years off if he testified against me,

326
00:19:42,560 --> 00:19:44,560
Speaker 1: and he refused to take that. He said, I have nothing,

327
00:19:44,880 --> 00:19:50,240
Speaker 1: nothing to say about rage, and you know that shows

328
00:19:51,240 --> 00:19:55,679
Speaker 1: backbone and strength of character in some ways. And but

329
00:19:55,800 --> 00:19:57,760
Speaker 1: you said something about the prison which I want to

330
00:19:58,480 --> 00:20:02,320
Speaker 1: want to correct, which is that while I buy large

331
00:20:02,320 --> 00:20:06,280
Speaker 1: cope with it. Well, but I was in solitary confinement

332
00:20:06,359 --> 00:20:13,480
Speaker 1: for eight weeks and for the flimsiest of infractions and

333
00:20:13,520 --> 00:20:17,880
Speaker 1: no infraction at all. Actually, and if there is an

334
00:20:17,880 --> 00:20:22,439
Speaker 1: example of you know, power corrupts and absolute power cerrups, absolutely,

335
00:20:23,240 --> 00:20:26,959
Speaker 1: it's how the prison system is managed. And you know

336
00:20:27,040 --> 00:20:30,840
Speaker 1: they under the un Charter, solitary confinement beyond two weeks

337
00:20:30,960 --> 00:20:35,040
Speaker 1: is equivalent to torture. And they kept me there for

338
00:20:35,040 --> 00:20:38,320
Speaker 1: seven weeks at one time, seven weeks. And you would

339
00:20:38,320 --> 00:20:42,439
Speaker 1: think that solitary confinement would be a very quiet place,

340
00:20:42,560 --> 00:20:46,399
Speaker 1: you know, there's nobody, you know, in individual cells. Is

341
00:20:46,400 --> 00:20:50,320
Speaker 1: exactly the opposite, because people are banging on doors and

342
00:20:50,440 --> 00:20:53,399
Speaker 1: kicking door and they're going crazy inside. They're going crazy

343
00:20:54,280 --> 00:20:57,679
Speaker 1: and they're shouting and screaming, and it was the noisiest

344
00:20:57,680 --> 00:21:01,560
Speaker 1: place in the prison. And they do this willy nly.

345
00:21:02,320 --> 00:21:04,600
Speaker 1: They do this. Not only did it to me, no,

346
00:21:04,680 --> 00:21:07,480
Speaker 1: on isn't at all, And they do it too many

347
00:21:07,520 --> 00:21:11,159
Speaker 1: others And that should be highlighted. It seems like the

348
00:21:11,160 --> 00:21:15,159
Speaker 1: biggest regret that you have is not taking the stand

349
00:21:15,600 --> 00:21:18,200
Speaker 1: when you look back, is that your biggest regret? Sure,

350
00:21:18,480 --> 00:21:20,840
Speaker 1: yes it is. So you still think you could have

351
00:21:20,840 --> 00:21:25,119
Speaker 1: convinced the jury perhaps perhaps I I can't. You know, UM,

352
00:21:26,000 --> 00:21:28,320
Speaker 1: I don't think it was an even playing field. They

353
00:21:28,400 --> 00:21:31,080
Speaker 1: had it stacked against me. But I should have tried

354
00:21:31,119 --> 00:21:35,840
Speaker 1: my best. This was a decision I took, and uh,

355
00:21:36,000 --> 00:21:40,040
Speaker 1: therefore I cannot say that I did my very best.

356
00:21:40,160 --> 00:21:43,119
Speaker 1: I did. I fought the appeals and all that, but

357
00:21:44,000 --> 00:21:47,960
Speaker 1: I sort of I don't know what happened to me.

358
00:21:48,119 --> 00:21:52,480
Speaker 1: I just kind of froze and didn't testify. Thanks so

359
00:21:52,560 --> 00:21:55,399
Speaker 1: much for coming in. That's Rajatt Kopta. His book is

360
00:21:55,400 --> 00:22:01,560
Speaker 1: called Rajat Gupta Mine Without Fear. Thanks for listening to

361
00:22:01,560 --> 00:22:04,879
Speaker 1: the Bloomberg Law Podcast. You can subscribe and listen to

362
00:22:04,920 --> 00:22:08,600
Speaker 1: the show on Apple Podcasts, SoundCloud, and on Bloomberg dot

363
00:22:08,680 --> 00:22:13,200
Speaker 1: com slash podcast. I am June Brosso. This is Bloomberg