Buffett put off Goldman deal for DQ
- Last Updated: 2:33 PM, May 24, 2012
- Posted: 12:27 AM, May 24, 2012
Who wants ice cream?
Apparently Warren Buffett did in the middle of negotiating a huge $5 billion investment in Goldman Sachs during the frenzied days of the 2008 financial crisis.
When he was still hammering out the details, the famed investor told his banker not to bother him while he took his grandkids to the local Dairy Queen.
Buffett’s trusted investment banker, Byron Trott, revealed the quirky incident on Day Three of the government’s insider-trading trial against former Goldman director Rajat Gupta.
Trott, who was also Goldman’s vice chairman at the time of the deal, testified in Manhattan federal court about the investment, which he described as “about as top secret as you can get.”
The government alleges that Gupta leaked Buffett’s stock purchase to his hedge-fund pal, Raj Rajaratnam, along with other tips the former McKinsey & Co. head gleaned as a director of Goldman and Procter & Gamble.
Gupta, who faces up to 25 years if convicted, has pleaded not guilty.
“The worst act you could commit was to breach confidentiality,” said Trott, who orchestrated the deal between Buffett and the bank.
Trott, who now runs his own firm, BDT Capital Partners, told jurors that it all went down in a single day and that only the bank’s top brass was involved. Trott called Buffett around 10 a.m. or 10:30 a.m., and the board OK’d the transaction by late afternoon.
But Buffett still found time to have some fun.
“Warren had promised to take his grandkids to Dairy Queen, and I was not to interrupt him” until he returned at 2:30 p.m., Trott said.
The government alleges that Gupta tipped Rajaratnam before the deal was publicly announced, allowing him to buy Goldman stock before it popped on the news.
Yesterday, prosecutors also played a July 2008 phone call between Rajaratnam and Gupta, who told him that Goldman’s board had recently discussed acquiring a commercial bank like Wachovia.