Breaking! Breaking! Lloyd Blankfein Takes the Stand in Galleon Trial

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Photo: Mary-Louise Price; Photo: iStockphoto, Mario Tama/Getty Images

It's finally here! The moment Intel Jessica has dreamed of on her Intel pillow for the past fortnight! Lloyd Blankfein took the stand this morning at the Raj Rajaratnam trial. To mark the enormity of the occasion, Dealbreaker issued a seven-alarm alert. There was some debate whether a financial luminary like Lloyd would testify in such a high-profile criminal trial. And the Goldman Sachs CEO clearly made some stipulations. In a letter from the prosecution to Judge Richard Holwell, the Attorney General Preet Bharara's office said they didn't want Lloyd to be questioned about either: (1) “whether Goldman Sachs is presently the subject of any pending investigations by either the Department of Justice or the U.S. Securities and Exchange Commission” or (2) whether the bank bears any responsibility for the 2008 financial crisis. Prosecutors argued the defense could easily make Goldman — and by extension Lloyd — appear untrustworthy (no way!) by bringing up other legal proceedings it's tied up in. Rajaratnam’s lawyer John Dowd, who isn't afraid of a little combat, managed to insinuate as much all the same in his own letter to the judge.

"Today, counsel learned for the first time that neither Mr. Blankfein nor Goldman Sachs has been notified that they are a target (or for that matter a subject) of any active investigation.”

Bonus points to Dowd for making the phrase "has been notified" sound ominous.

Lloyd was there to speak on the matter of that phone call Goldman's former board member Rajat Gupta made to Rajaratnam 23 seconds after he was told that Berkshire Hathaway was going to make a $5 billion investment in Goldman. Was that phoner cool with Goldman? Blankfein's testimony established firmly that it was not. From The Wall Street Journal's courtroom report:

“On that call, did Rajat Gupta violate Goldman Sachs’s confidentiality policy?” Special Assistant U.S. Attorney Andrew Michaelson asked.

“Yes,” Mr. Blankfein said.

Aside from identifying a photo of Gupta — there are a lot of Raj-based fellows in this case, after all — Blankfein didn't say much more. But the Journal notes he was in trademark form, "He smiled at the gathered gaggle of reporters covering the trial as he walked in the courtroom and gestured with his hands as testified." For a few moments, even commoners were permitted to bask in the "sun god's" glow.

Goldman's Blankfein: Gupta Violated Board Confidentiality [WSJ]
Goldman’s Blankfein Says Rajat Gupta Violated Firm’s Policies [Businessweek via Dealbreaker]
The Galleon Trial: Goldman's Blankfein Takes Stand [WSJ]
Goldman’s Blankfein to Testify at Rajaratnam’s Trading Trial [Bloomberg]