Called to the stand at the start of the trial were two current Goldman Sachs board members, who were also on theboard in 2008 when Gupta was on the board. The impression given was that during the height of the financial crisis in 2008, GS CEO Lloyd Blankfein conducted a number of hurried conference calls with the directors:
“There were a very large number of meetings called on very short notice,” typically by telephone, William George, an independent Goldman Sachs director and a management professor at Harvard Business School, told jurors in Manhattan federal court. “They included a range of things.”In other words, these were very critical calls, not likely to contain much chit-chat. Blankfein was disseminating important information, which makes this part of the Bloomberg report very enlightening:
George’s testimony focused on Blankfein’s briefings to the board in September 2008 as Lehman Brothers Holdings Inc. collapsed...George told jurors that Blankfein’s board briefings, or “posting calls,” came midweek and on weekends that September, and sometimes twice on a Sunday. Directors had barely two hours’ notice before they had to dial in...
As early as Sept. 14, Blankfein told his board about the Federal Reserve’s talks about Lehman, the risk that American International Group Inc. might fail and Goldman Sachs’s own liquidity.What was the Fed telling Blankfein about Lehman that was so important that he told the board about it? It clearly sounds like information that would allow GS directors to make more informed decisions about the financial climate. Lehman filed for bankruptcy the next day, Monday September 15, 2008. This makes the information Blankfein gave the board about Lehman critical.
Now, some guy in middle America may not know what to do with such information on a Sunday, but Goldman Sachs is a global giant that could easily trade off such information in European markets long before U.S. markets even opened on that Monday.
This, thus, leads to a series of very interesting questions:
What did the Fed told Blankfein about Lehman?
What did Blankfein tell the board about Lehman?
And what trading did GS conduct before markets officialy opened on that Monday?