Rajratnam had prior information on Buffet-Goldman deal: report

The Goldman saga is getting murkier with The Wall Street Journal reporting that a director of the investment bank had informed a manager of beleaguered hedge fund Galleon Group about Warren Buffett's $5-billion investment in the bank before the deal was made public.

According to a report published yesterday in The Wall Street Journal, Goldman director Rajat Gupta gave Raj Rajaratnam, head of the Galleon Group hedge fund, advance notice of the deal.

Gupta told Goldman last month he would not pursue another term as a director after being told that prosecutors were examining conversations between him and Rajaratnam.

The Journal quoted Gupta's lawyer as saying that Gupta "has neither violated the law nor done anything else improper."

When asked by Goldman's in-house lawyers, Gupta denied wrongdoing in the Rajaratnam matter, added the Journal.

Goldman has said Gupta will stay on its board until his term ends next month, though the Journal said he did not participate in a board meeting on Monday.