(Reuters) -- A New York jury on Wednesday heard former Goldman Sachs director Rajat Gupta on a FBI wiretap casually discussing business with Raj Rajaratnam, the now-imprisoned hedge fund founder he is accused of tipping off about boardroom secrets.

The 23-minute phone call on July 29, 2008, has no direct connection to the criminal charges against Gupta, but prosecutors played it to jurors to show the cozy relationship he had with Galleon Group founder Rajaratnam and their investments together.

By the way, on that I want you to keep, us to keep having the dialogue as to what ... you know how I can be helpful in Galleon International. By the way not Galleon International, Galleon Group, Gupta told Rajaratnam, according to the court transcript of the conversation.

Their discussion begins with Rajaratnam telling Gupta he heard a rumor that Goldman might look to buy a commercial bank and Gupta's response is that this was a big discussion at the board meeting. Investment bank Goldman did not acquire any bank.

The conversation goes on with Gupta seeking career and business advice from Rajaratnam. While the tape was being played to the jurors, Gupta sat at the defense table leafing through the 27-page transcript.

Gupta, 63, is accused of providing Rajaratnam with boardroom secrets between March 2007 and January 2009 while he was a director of Goldman Sachs Group Inc and Procter & Gamble Co. Gupta is also a former head of McKinsey & Co management consultancy.

Galleon had $7 billion under management at its peak and was wound down after Rajaratnam's October 2009 arrest in a broad U.S. crackdown on insider trading.

Part of the wiretap of Rajaratnam's cell phone was also played at his trial a year ago when a jury convicted him of 14 criminal charges. He was sentenced in October to 11 years in prison.

Gupta's lawyers argue that the prosecution's evidence against him is circumstantial and speculative. They say Gupta and Rajaratnam had a falling out in 2008 and Gupta lost all $10 million of an investment in a Galleon fund.

Goldman is key to the trial. William George, a director at Goldman since 2002, is expected to testify for the government on Thursday. The investment bank's chief executive, Lloyd Blankfein, could testify at the trial.


Gupta is accused of tipping off Rajaratnam about a deal that gave Goldman a $5 billion boost from renowned investor Warren Buffet at the height of the 2008 financial crisis, in an illegal breach of his fiduciary duties.

On Wednesday, a leading banker testified that the deal was as top secret as you could get.

Former Goldman banker Byron Trott, a long-time Buffett confidant, told the jury that it was policy within a tightly-knit group of executives who negotiated such deals never to talk about confidential information in public, or elevators. It was grounds for being fired.

Called to testify by prosecutors on the third day of Gupta's trial, Trott described how the investment deal was finalized in 30 or 40 minutes on the afternoon of Sept. 23, 2008.

Warren was not reachable until 2:30 p.m. He told me he promised to take his grandkids to Dairy Queen, said Trott, who left Goldman in 2009 and now runs his own merchant bank.

Prosecutors contend that Gupta tipped Rajaratnam 16 seconds after a conference call in which the Goldman board approved the Buffett investment, just minutes before markets closed at 4 p.m. on Sept. 23, 2008.

Rajaratnam then hurriedly ordered his traders to buy Goldman stock, reaping $840,000 in profits when the stock rose the next day, according to trial evidence. The Buffett investment was not made public until about two hours after trading ended.

Gupta has pleaded not guilty to five counts of securities fraud and one count of conspiracy. The trial started on Monday and is expected to last about three weeks before a jury that includes an executive of a non-profit organization, a psychiatric nurse, a professor and an elementary school teacher.

Separately, a prosecutor told the judge during a jury break that a Goldman managing director, David Loeb, provided Rajaratnam with information about Intel Corp, Apple Inc and Hewlett Packard.

Loeb's name also came up on Tuesday in evidence presented to Gupta's jury. A main defense argument is that Rajaratnam had sources other than Gupta to provide him confidential company information.

Loeb has not been charged. He did not respond to email and phone messages. A Goldman spokesman declined to comment.

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, Bernard Orr and Bernadette Baum)