Goldman CEO Lloyd Blankfein testified at the Raj Rajaratnam insider trading trial yesterday.
From most accounts, Blankfein’s testimony was devastating to Rajaratnam.
Along with just about every other piece of evidence that has been presented thus far, it suggested that Rajaratnam is guilty as charged and will soon be spending some time in a Federal prison.
But the more surprising thing about Blankfein’s appearance was not what he said on the stand, but what he did when he stepped down.
What did he do?
He walked over to the defence table and shook Raj Rajaratnam’s hand.
That was a very classy thing to do, and it says a lot about Blankfein as a person.
Normally on Wall Street, when someone gets in trouble, everyone else on Wall Street rushes to distance themselves, lest they be considered a sympathizer–or, worse, a co-conspirator. In private, some folks stay supportive, but they rarely show that support in public.
Instead, if forced to render public judgement, most Wall Street folks will either demur or express disgust and shock at the disgraceful conduct that has been discovered within their midst. That’s the easiest and most popular response, of course. And it’s also the least-risky response, as far as PR is concerned.
(You don’t win PR points defending folks that the public has concluded are scumbags. And, for a variety of reasons, the public concludes that just about every Wall Street figure who gets in trouble is a scumbag. And some of them certainly are.).
In any event, Lloyd Blankfein is the sitting Chief Executive Officer of the most powerful and important Wall Street firm in the world. He’s also the CEO of a firm that has come under intense scrutiny and criticism of its own in recent years. The “safe” thing for Blankfein to have done, therefore, would have been to behave the way many neutral witnesses at trials behave, which is to pretend that the defendant isn’t even in the room.
Blankfein certainly could have behaved this way. He could have come in and out of his secret side door without ever acknowledging Rajaratnam. This wouldn’t have meant he was passing public judgement on Rajaratnam, and Rajaratnam certainly would have understood this.
But, instead, in view of not only the courtroom and the jury but hundreds of reporters, Blankfein walked over to the defence table and shook Rajaratnam’s hand.
Cynics will say that he did this because Rajaratnam is still a billionaire and one day, after he gets out of jail, will be a Goldman client again.
I wasn’t there, and I certainly can’t see inside Blankfein’s head. But I think that’s b.s.
I think Blankfein shook Rajaratnam’s hand because, at a human level, he sympathizes with what Rajaratnam is going through. And, at a human level, he thought that letting Rajaratnam know that would be a stand-up thing to do.
And it was.
Regardless of what these two men represent–and, symbolically, they represent a lot, especially these days–they’re still two men. They’re men who work in the same industry and certainly know each other by reputation, if not personally. They’re also men who both been through rough times of late. One of these men has come through those rough times with his job, reputation, and career intact. The other is the defendant in a criminal trial that he is almost certain to lose.
And in that situation, at a human level, the gracious thing to do is exactly what Blankfein did: Walk over and shake the other man’s hand.