Taped call suggests Rajat Gupta told Rajaratnam about Goldman plans

In a July 29, 2008 conversation played Tuesday in a New York court, where Rajaratnam, co-founder of the hedge fund Galleon Group, is on trial, Gupta told him Goldman was weighing an acquisition of either Wachovia or American International Group (AIG).

Rajaratnam, working from his Greenwich, Connecticut, home that day, told Gupta that he was meeting with Gary D. Cohn, the president of Goldman, later in the week. He asked Gupta about a rumour that Goldman might look to buy a commercial

"This was a big discussion at a board meeting," Gupta said on the taped call. "And, you know, it was, uh, a divided discussion in the board."

Goldman was bearish on commercial banks, he said, but the board was "opportunistic" and if Wachovia "was a good deal they'd go and buy Wachovia."

Gupta also said that the board was weighing the acquisition of an insurance business, including AIG. "Yes, AIG was in the discussion mix," he said. Ultimately, Gupta concluded, "I would be extremely surprised" if there was "anything imminent."

The detailed discussion of Goldman's board meeting is the first time the government has disclosed specific comments made by Gupta to Rajaratnam about the bank's internal dealings.

Rajaratnam and Gupta are also heard discussing former Indian American McKinsey & Co. partner Anil Kumar, prosecution's star witness in the biggest US insider-dealing trial in decades.

"He is constantly ... scheming is not the right word, but constantly trying to figure what other people's angles are," Rajaratnam said to Gupta.

t another point Rajaratnam says of Kumar, "I'm getting a feeling that he's trying to ... you know, be a mini Rajat, right?"

He goes on to say: "And I, you know, honestly, Rajat, I'm giving him a million dollars a year for doing literally nothing."

Earlier this month, the Securities and Exchange Commission alleged in a civil case that Gupta had passed along inside information about Goldman to Rajaratnam.

An attorney for Gupta, who left Goldman's board in May, has said he hasn't been accused of trading on stock tips, or being compensated for the information he allegedly gave Rajaratnam.