Bloomberg News

Goldman’s David Loeb Passed Tip to Rajaratnam, U.S. Says

May 23, 2012

David Loeb, Goldman Sachs Group Inc. (GS:US)’s head of Asia equity sales in New York, passed information to Raj Rajaratnam about Apple Inc. (AAPL:US), Intel Corp. (INTC:US) and Hewlett- Packard Co., Assistant U.S. Attorney Reed Brodsky said.

Brodsky made his remarks today to U.S. District Judge Jed Rakoff in Manhattan after Gary Naftalis, an attorney for Rajat Gupta, complained that prosecutors withheld evidence about Loeb. Prosecutors denied that allegation.

Gupta, an ex-Goldman Sachs director who ran the consulting firm McKinsey & Co. from 1994 to 2003, is on trial for passing multiple insider tips to Galleon Group LLC co-founder Rajaratnam in a conspiracy that ran from 2007 to January 2009.

“Mr. Loeb, the evidence will show, provided Intel, and Apple and Hewlett-Packard information to Mr. Rajaratnam,” Brodsky said at a hearing outside the jury’s presence. Brodsky said the tips allegedly passed by Loeb were different from those Gupta is accused of leaking.

The defense “wants to blow this up and confuse the jury,” Brodsky said at the hearing.

It’s the first time the government has publicly named Loeb and confirmed that the U.S. has evidence that he gave information about Apple, Intel and Hewlett-Packard to Rajaratnam.

Loeb hasn’t been charged with wrongdoing. Gupta denies wrongdoing.

Other Tippers

Naftalis told Rakoff that Loeb is heard on a U.S. wiretap passing information.

“He’s on a tape giving out information” about those companies, Naftalis said to the judge.

Naftalis said that prosecutors withheld exculpatory evidence he said could help his client. He said that Gupta did nothing wrong and told jurors that Rajaratnam had tippers “all over town” in his opening arguments May 21, including those at Goldman Sachs who weren’t his client.

Rakoff ruled that prosecutors hadn’t violated any rules regarding evidence in their handling of Loeb. The judge said Gupta’s lawyers had learned about Loeb’s actions as a result of disclosures the government made to them.

Rajaratnam is serving an 11-year prison sentence for insider trading.

Michael DuVally, a spokesman for Goldman Sachs, declined to comment about the prosecutor’s and defense lawyer’s s statement about Loeb.

To contact the reporters on this story: Patricia Hurtado in New York at; David Glovin in New York at

To contact the editor responsible for this story: Michael Hytha at

Cash Is for Losers

Companies Mentioned

  • GS
    (Goldman Sachs Group Inc/The)
    • $189.59 USD
    • -0.16
    • -0.08%
  • AAPL
    (Apple Inc)
    • $116.47 USD
    • 0.16
    • 0.14%
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