UPDATE 3-Prosecutor says Gupta cheated, abandoned duties - Reuters UK
* Ex-Goldman director Rajat Gupta denies charges
* Current Goldman director set to testify for prosecution
* Former Goldman banker also on list to take witness stand (Recasts lead; adds opening arguments from prosecution, defense)
By Grant McCool
NEW YORK, May 21 (Reuters) - Former Goldman Sachs director Rajat Gupta "threw away his duties" by divulging bank secrets to hedge fund manager Raj Rajaratnam, a U.S. prosecutor said at the start of Gupta's insider-trading trial on Monday.
The defense punched back that the government had no direct evidence.
Gupta, 63, once a boldface name in business and charity circles, is the most prominent corporate executive charged in a U.S. government crackdown on insider trading in recent years. Galleon Group founder Rajaratnam, an erstwhile friend and business associate of Gupta, was convicted of insider trading a year ago and is serving an 11-year prison term.
Gesturing with his left arm toward Gupta in a Manhattan federal courtroom, prosecutor Reed Brodsky said the case "is about this man" and "how he violated his duties and abused his position as a corporate insider."
As Brodksy delivered his opening argument to the jury, Gupta stared at him, barely moving in his seat at the defense table. His wife, Anita, and their four adult daughters sat in the front row, also absorbed by the proceedings.
During his turn at the podium, Gupta's lawyer Gary Naftalis painted a very different picture of Gupta, who was born in India and attended Harvard Business School before heading to McKinsey & Co management consultancy.
Naftalis repeatedly told the jury that there was "no real, hard, direct evidence" against him despite 10 months of FBI wiretaps on Rajaratnam's phones in 2008 and 2009.
"Rajaratnam had sources all over town giving him information. He even had sources at Goldman Sachs," Naftalis told the 12-member jury, which includes a nurse, an elementary teacher, and two executives.
The trial is expected to last three to four weeks. The government will call its first witnesses on Tuesday.
One of the legal challenges for prosecutors in the trial is to prove beyond a reasonable doubt that Gupta was Rajaratnam's source for a host of secrets while serving on the boards of Goldman Sachs and Procter & Gamble between March 2007 and January 2009. They also have to prove Gupta benefited.
FALLING OUT
Naftalis argued in his 45-minute opening statement that Gupta had no reason to illegally spill corporate secrets to Rajaratnam, someone "he felt lost him a lot of money and betrayed him." The men had a falling out in 2008 and Gupta lost all $10 million of an investment with Galleon funds.
Assistant U.S. Attorney Brodsky told the jury that Gupta and Rajaratnam were invested together in a fund called Voyager Capital Partners for several years. He said while they went their separate ways "that doesn't undo what happened."
Gupta faces a possible maximum prison term of 25 years if he is convicted on the charges of securities fraud and conspiracy.
Goldman will play a key role at the trial. One of the government's core allegations is that Gupta tipped Rajaratnam to a $5 billion investment by Warren Buffett's Berkshire Hathaway Inc in Goldman during the 2008 financial crisis and Goldman's surprise fourth-quarter loss that year.
Brodsky told the jury it would hear evidence that on Sept. 23, 2008, Gupta called Rajaratnam 16 seconds after a special Goldman board meeting approved the $5 billion investment.
Rajaratnam then ordered his traders to buy Goldman stock, prosecutors contend. The investment boost to Goldman was not made public or known to ordinary investors until after the market closed that day, Brodsky said.
"It was against the rules for Gupta or anyone else who knew to tell anyone else about it," Brodsky said in his statement.
Goldman has not been charged with any wrongdoing.
Before the jury was seated, Brodsky told Judge Jed Rakoff that the government plans to call former Goldman banker Byron Trott, a long-time Buffett confidant, and William George, a director at the investment bank since 2002, as witnesses this week.
Other witnesses who could take the stand during the trial include Goldman Chief Executive Lloyd Blankfein, who testified for the government at the Rajaratnam trial and said Gupta breached his fiduciary duty to the investment bank.
The case is USA v. Gupta, U.S. District Court for the Southern District of New York, No. 11-907. (Reporting By Grant McCool; Editing by Martha Graybow, Tim Dobbyn, Maureen Bavdek and Bernard Orr)
UPDATE 3-DaVita looks to new healthcare model with $4.42 bln deal - Reuters UK
(Adds analyst comment; updates shares)
* Buys HealthCare Partners in cash & stock deal
* To pay $3.66 bln cash, 9.38 mln DaVita common shares
* Deal to close in early Q4
* DaVita shares up 3 percent
May 21 (Reuters) - DaVita Inc, the biggest U.S. operator of dialysis clinics, sought to better align itself with government efforts to cut healthcare costs with a $4.42 billion deal to buy HealthCare Partners, an operator of physician practices.
The deal will allow DaVita to offer a more integrated group of services that the government is looking to incentivize through its accountable care organizations (ACO) model.
"We believe this diversification towards a wider patient population makes sense and follows the government's savings goals and most recent incentives more closely," Nomura analyst Martin Brunninger said.
The Medicare reimbursement model was changed last year to encourage clinical service providers, including dialysis operators, to reduce costs and use drugs more sparingly.
This could favor large players such as DaVita and its biggest rival FMC, the U.S. arm of Germany's Fresenius Medical Care, because they are better placed to cut costs, but it also creates revenue pressures.
The Healthcare deal helps mitigate this risk through the ACO model, which integrates patient treatment across care settings, such as doctors' offices, hospitals and long-term care facilities.
Privately held HealthCare Partners, based in Torrance, California, runs medical practices and physician networks in Southern California, Central Florida, and Southern Nevada. Its revenues in 2011 were about $2.4 billion.
"This is not a cost-synergy play at all," a DaVita executive said on a conference call with analysts.
The purchase price consists of $3.66 billion in cash and about 9.38 million shares of DaVita common stock, DaVita said.
The company, whose shareholders include Warren Buffett's Berkshire Hathaway Inc, expects to fund the cash portion through a combination of available cash, borrowings and debt financing.
The transaction is expected to close in early fourth quarter, and the combined company will be named DaVita HealthCare Partners Inc, DaVita said.
JP Morgan Securities LLC served as financial adviser for the deal.
DaVita shares, which have lost 10 percent of their value since the company reported quarterly results earlier this month, were up 3 percent at $83.24 in morning trade on the New York Stock Exchange. (Reporting by Bijoy Koyitty, Sakthi Prasad and Esha Dey in Bangalore; Editing by Mark Potter, Jane Merriman and Sriraj Kalluvila)
Poland's Lewandowski looks forward to home help - UEFA
With UEFA EURO 2012 less than three weeks away, Poland striker Robert Lewandowski is savouring the "once-in-a-lifetime" opportunity of representing his country at a final tournament on home soil.
As the club season winds down across Europe and the competing coaches name their squads in advance of the 29 May deadline, excitement is building in the 16 countries taking part in the 14th continental finals. None more so than in Poland, where the Borussia Dortmund striker says a memorable time awaits the co-hosts' players and supporters.
"For every player this is a once-in-a-lifetime thing, a tournament like this in your country," Lewandowski, a scorer of 22 goals in Dortmund's Bundesliga title triumph, told UEFA.com. "I hope that for the Polish players and fans this creates unforgettable emotions and will be a great experience."
With the honour of staging the finals also comes expectation, however, as Poland's frontline striker concedes. "There are advantages and disadvantages," the 23-year-old said. Having the fans and the entire country, including those in front of the television, behind us is an advantage, but the pressure and expectations will be great, so we have to prepare both physically and mentally."
Lewandowski's club-mate, Jakub Błaszczykowski, agrees, saying: "We're in a good position because we're playing at home. It might paralyse [players] or provide an extra stimulus, but, knowing our fans, I'm convinced they'll stand by us."
To hear the full interview with the Dortmund and Poland pair watch the video above.
iPhone 5 will be the "Steve Jobs Phone" - PC Advisor
The iOSphere has happily concluded that iPhone 5 will be the Steve Jobs phone, because he purportedly "worked closely on the redesigned phone" before his death last October. See also iPhone 5 release date, specs and rumour round up.
The conclusion is based on a Bloomberg story which cites exactly one source, someone "with knowledge of the plans," as the basis for this assertion. Visit New iPhone 5 to have flexible display.
Bloomberg mentions a total of three such sources in the story, but each one for separate assertions. And the assertions don't amount to much, as one can tell from reading the rest of the story, which rehashes some rumors about screen sizes, some generalities about the competitive smartphone market, and so on. Go to iPhone 5 will "launch" in September.
For having talked with three people with knowledge of Apple's plans, there's precious little that's new or detailed information in the story. Bloomberg claims, again from one source, that iPhone 5 will be redesigned but offers not a single detail regarding how.
Another source repeats the previously circulated rumors that Apple has placed orders for displays "that are bigger than the 3.5-inch size now on the smartphone," but again without any detail as to what the larger size would actually be.
"Apple has been working on the new device since before the current iPhone 4S model was introduced last October, said one person with knowledge of the project. Jobs, who had gone on medical leave from Apple starting last January, played a key role in developing the phone, this person said."
Jury awards brothers $700,000 in lawsuit against Green Bay Catholic Diocese - Green Bay Press-Gazette
APPLETON When an Outagamie County jury decided the Catholic Diocese of Green Bay covered up a priests history of child molestation, it sent a message to the rest of Wisconsin, an advocate for sexual abuse victims said.
The outcome of Todd and Troy Merryfields civil lawsuit against the diocese Monday empowers victims across the state to come forward, said Peter Isely, the Midwest director for Survivors Network of those Abused by Priests. For others who have reported sexual abuse by priests, this should increase the pressure to bring these cases to a just resolution.
That is always something that occurs when this culture of secrecy ... is pierced and opened by cases like this, Isely said.
Rev. John Feeney molested the Merryfields in 1978, when they were 12 and 14 years old. In 2004, Feeney was convicted of sexual assault of the brothers. After the criminal trial, the brothers said they learned the priest had a history of similar assaults in the 1960s and 1970s that the diocese knew about and hid from parishioners at St. Nicholas Church in Freedom, which the Merryfields attended.
So in 2008, they sued the diocese and now-deceased Bishop Aloysius Wycislo, who was in charge of ensuring priests were fit to serve, for fraudulent misrepresentation and sought unspecified damages.
Things got specific Monday, when the Merryfields attorneys asked the jury to compensate Todd $900,000 and Troy $1.8 million for pain, suffering and medical costs related to the molestation. The diocesan attorney, Patrick Brennan, said if the jury found the diocese guilty, the brothers should be given $100,000.
The jury awarded Todd $225,000 and Troy $475,000, but that might be just part of the dioceses bill. On Wednesday morning, the jury will reconvene and hear more witnesses to determine if, and how much, the diocese must pay in punitive damages, which are punishment to deter the organization from committing fraud again.
Deacon Timothy Reilly of the Green Bay diocese read a statement outside the courthouse after the verdict, in which he apologized to the Merryfields for the pain they suffered but disagreed with the jurys decision.
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