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&lt;p&gt;The media circus surrounding the insider trading trial of Raj Rajaratnam escalated yesterday as Lloyd Blankfein, the world famous/infamous CEO of Goldman Sachs, took the stand as a witness to the alleged transgressions of Rajat Gupta.  Gupta, the former head of McKinsey &amp;amp; Company, sat on the board at Goldman in 2008 during the height of the financial crisis; in that year, prosecutors allege (and wiretapped telephone conversations confirm), he began passing details of board meetings to Rajaratnam, which the Galleon man used to orchestrate favorable trades.  Meanwhile, on the day of Blankfein&#39;s testimony, prosecutors revealed that Gupta chose to plead the Fifth rather than answer SEC questions about his involvement in the case.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Blankfein speaks&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;After listening to a recording of a conversation between Gupta and Rajaratnam in which the pair discuss Berkshire Hathaway&#39;s imminent $6 billion investment in Goldman, Blankfein admitted that Gupta had indeed betrayed the bank&#39;s confidentiality policy with the disclosure.  He also admitted that, at the time of Gupta&#39;s resignation from the board in March 2010, he &quot;knew there were some questions about Rajat&#39;s behavior.&quot;  &quot;I had an awareness of&amp;mdash;I want to say inkling&quot;&amp;mdash;that Gupta was up to no good, he told the jury.  He does assert that Gupta&#39;s resignation was not a result of any pressure from within Goldman and was totally of his own accord.  Defense attorney John Dowd underscored that notion by highlighting the bank&#39;s press release that announced Gupta&#39;s departure, which praised the former McKinsey managing director and thanked him for his &quot;important contributions to Goldman Sachs.&quot; &quot;His independent advice, keen understanding of the issues and belief in our culture has had a tremendous impact on our firm,&quot; the release reads.&lt;/p&gt;&lt;p&gt;Analysts suggest that Blankfein&#39;s testimony helps the prosecution and the defense in roughly equal measure.  While the prosecution will use Blankfein&#39;s assertion that Gupta violated corporate rules to further compromise Gupta&#39;s integrity (and demonstrate that corrupt practices were commonplace throughout the Kumar-Gupta-Rajaratnam trinity), the defense can claim that the praise heaped upon the outgoing Gupta by his former employers (Goldman) was more indicative of a clean, productive stint on the board than that of a conspiring insider trader.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Gupta doesn&#39;t&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;While Blankfein smiled often and appeared eager to explain Goldman&#39;s position in the Rajaratnam debacle, prosecutors say that Rajat Gupta took the opposite route, refusing to answer SEC investigators when initially questioned about his involvement with Rajaratnam and Anil Kumar, another ex-McKinsey consultant.  The Assistant US Attorney on the case told the judge that &quot;Mr. Gupta took the Fifth Amendment when he spoke to the SEC.&quot;  Defense attorney Dowd unsurprisingly indicated that he wouldn&#39;t use Gupta&#39;s Fifth Amendment invocation, known as a Wells submission, as evidence when questioning Blankfein.&lt;/p&gt;&lt;p&gt;It&#39;s an interesting change of heart for Gupta, who recently made headlines by suing the SEC for denying his right to a trial by jury.  That civil court action appeared to suggest that Gupta would aggressively fight against any government accusations and attempt to clear his name.  While by no means an admission of guilt, Gupta&#39;s invocation of the Fifth Amendment seems less indicative of a quest for absolution and more of the &quot;deny, delay, defend&quot; tactic that McKinsey famously suggested insurance companies implement in the 1990&#39;s.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;More developments&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;padding-left: 30px;&quot;&gt;&amp;bull;Did anyone else know that Gupta is/was the &quot;special advisor on management reforms to the Secretary General of the United Nations&quot;?  &lt;em&gt;Business Insider&lt;/em&gt; says so.  Oh, how the mighty have fallen.&lt;br&gt;&amp;bull;Goldman Sachs makes money.  A back-and-forth between the prosecutor Andrew Michaelson and Blankfein:&lt;br&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &amp;bull;Michaelson: &quot;What was happening in October 2008?&quot;&lt;br&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &amp;bull;Blankfein: &quot;We were losing money.&quot;&lt;br&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &amp;bull;Michaelson: &quot;What was the significance of that?&quot;&lt;br&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &amp;bull;Blankfein: &quot;We generally make money.&quot; [Blankfein cracks up]&lt;br&gt;&amp;bull;Gupta&#39;s attorney is Gary Naftalis, a white collar crimes specialist from Kramer Levin Naftalis &amp;amp; Frankel in New York.  Rajaratnam&#39;s John Dowd is an Akin Gump rainmaker.  If the Vault white collar defense law ranking is to be considered,  Rajaratnam is better equipped.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;For more information:&lt;/strong&gt;&lt;br&gt; &lt;em&gt;NYT&lt;/em&gt;&lt;br&gt; &lt;em&gt;WSJ&lt;/em&gt;&lt;br&gt; &lt;em&gt;Business Insider&lt;/em&gt;&lt;br&gt; &lt;em&gt;Bloomberg&lt;/em&gt;&lt;/p&gt;

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