NEW YORK: Closing arguments began Wednesday in one of the biggest Wall Street insider trading probes in a generation with a former Goldman Sachs executive accused of feeding financial tips to a friend.
"Rajat Gupta abused his position as a corporate insider," US prosecutor Richard Tarlowe told the court, alleging the Indian-born businessman was a "secret pipeline for" Raj Rajaratnam, founder of the Galleon Group hedge fund.
The disgraced Rajaratnam was jailed last year as the central figure in an insider trading ring, and the prosecutor alleged the tip-offs from Gupta had enabled him to "use that secret information to buy stocks."
"Gupta had a legal duty not to disclose secret information... Time and time again Gupta betrayed that trust and violated that duty," Tarlowe said.
"The evidence shows that Gupta tipped (off) Rajaratnam periodically in anticipation of receiving multiple benefits in return."
Gupta, 63, appeared in court in a dark suit, white shirt and red tie. Before the hearing started he turned around, smiling and chatting with his wife and relatives in the first row.
The defense was due to present its closing arguments later, before the case will then be handed over to the jury to consider its verdict in the trial already in its fourth week.
Gupta has denied the charges, but if convicted he could face a double-digit prison term.
As a board member of Goldman Sachs, among other high-level positions he held in US business, Gupta was privy to hugely valuable information, such as the bank's profit reports and news during the 2008 financial crisis of a $5 billion investment by Warren Buffett's Berkshire Hathaway.
Prosecutors say that with a CV that included membership of the boards of Goldman Sachs and Procter & Gamble, and a job as worldwide head of management consultancy giant McKinsey & Co, Gupta was "the ultimate insider."
They maintain he was a key part of Rajaratnam's corrupt network that routinely broke Wall Street's rules against trading on non-public information.
Gupta is accused of tipping off Rajaratnam on bombshell market news such as Goldman's fourth quarter loss in 2008 -- early information that allegedly let Sri Lankan-born Rajaratnam make money when the news became public.
Goldman chairman and CEO Lloyd Blankfein testified at the trial, saying Gupta was not authorized to make any disclosures of the bank's information.
Board meetings were always confidential and the data, which had not yet been made available to the investing public, was "very important and potentially market moving," Blankfein said.
But Gupta's lawyers say Rajaratnam could have harvested his information from many other sources and that there is no smoking gun linking their client to any illegal trade.
Rajaratnam, founder of the Galleon Group, was convicted last year of insider trading and sentenced to 11 years in prison.
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