Judge orders questioning of Goldman chairman

By Larry Neumeister

Associated Press

Published: Tuesday, March 27 2012 11:10 p.m. MDT

People come and go from Goldman Sachs headquarters, Wednesday, March 14, 2012 in New York.

Mark Lennihan, Associated Press

Enlarge photo»

NEW YORK — A judge handed the government several setbacks Tuesday in its insider trading prosecution of a former Goldman Sachs board member by letting the company's chairman testify about his interactions with the government and by letting the defense learn more about separate criminal and civil probes.

The rulings were part of a package of pretrial decisions issued by U.S. District Judge Jed Rakoff prior to the April trial of Rajat Gupta, who sat on the boards of Goldman Sachs and the Procter & Gamble Co. when the government alleges he fed inside information to a billionaire hedge fund founder.

The government claimed it could block Goldman Sachs chairman Lloyd Blankfein from testifying about his discussions with government attorneys and at least one FBI agent prior to a seven-hour deposition last month.

It also argued that it could stop Gupta's lawyers from seeing notes produced by the Securities and Exchange Commission after it conducted interviews with prosecutors of 44 witnesses because the SEC was not an "arm of the prosecutor."

Rakoff said the government had unwittingly waived any rights it had to keep its discussions with Blankfein secret by questioning him before his deposition.

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