Rajat Gupta, the former top rank Wall Street executive accused of insider trading, was never allowed to divulge information he allegedly fed to a hedge fund trader, the head of Goldman Sachs bank said Thursday.
As a board member of the influential 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 financial crisis of 2008 of a $5 billion investment by Warren Buffett's Berkshire Hathaway.
Prosecutors allege that Gupta passed on such tips to his friend Raj Rajaratnam, the founder of the Galleon Group hedge fund who was imprisoned last year as the central figure in an insider trading ring.
Blankfein did not comment on those allegations, but made clear that such a move would have been illegitimate.
"Did you authorize Mr Gupta to disclose?" Assistant US Attorney Reed Brodsky asked Blankfein in New York federal court. "No," the Goldman CEO and chairman replied.
"Are you aware of anybody else at Goldman Sachs who authorized Mr Gupta to disclose such information?" Brodsky continued.
"No," Blankfein said.
This was Blankfein's second partial day of testimony and cross examination of him was expected to finish on Friday. The government was then scheduled to call its final witness and rest its case.
The defense team will begin its own case by showing comments from Ajit Jain -- an investor who is seen by some as a possible successor to Buffett at Berkshire Hathaway and who testified in a recorded deposition -- a spokeswoman for the federal court said.