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Blankfein said former Goldman director Rajat Gupta broke the firm's internal regulations in 2008 by giving hedge fund manager Raj Rajaratnam an inside take on discussions about the bank's possible acquisitions.
Rajaratnam, founder of the Galleon Group, is accused by the government of creating a corrupt network of informants, including Gupta, to rack up millions of dollars in fraudulent profits based on illegal market tip-offs.
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The New York federal court was played a wiretap telephone recording of Rajaratnam asking Gupta about rumors that Goldman might buy a commercial bank, possibly Wachovia, or an insurance company.
"This was a big discussion at the board meeting," Gupta said during the 2008 call, which was secretly taped by the FBI.
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"It was a divided discussion," he said, adding that he would be "extremely surprised if anything is imminent.
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"
Blankfein, wearing a somber dark suit and blue tie, was asked if Gupta had broken the company's confidentiality policies.
"Yes," Blankfein