Jurors at a closely watched federal trial are learning that the high-stakes world of hedge funds sometimes sounded like this:
"I need to get back to basics. I'm gonna become Mr. October."
"Yeah, I love that."
And: "Hey get me a job with one of your powerful friends, man. I'm tired of this company."
Also: "Oh dude, we're f-----."
The recordings _ some crude and silly, others complex and confusing, all allegedly illegal _ are key evidence in the case against Raj Rajaratnam, the former hedge fund manager who before his arrest in 2009 made a fortune for himself and others with his mastery of the technology and other markets. Prosecutors say the calls, combined with the testimony of cooperators, pull back the curtain to reveal how Rajaratnam was cultivating friendships with cash, trading advice and family vacations while committing his crimes.
The trial, which is entering its fourth week, has become a showcase for what prosecutors say is the stepped-up use of FBI wiretaps in white collar cases.
Wall Street insiders "who are considering breaking the law will have to ask themselves one important question: Is law enforcement listening?" U.S. Attorney Preet Bharara warned when he announced the Rajaratnam case.
The FBI was listening to Rajaratnam, founder of the Galleon Group, and a nefarious network of other fund managers and public company executives nonstop in 2008 before he was charged with earning more than $50 million illegally by trading on inside information _ what prosecutors have billed as the largest hedge fund insider trading case ever.
In his opening statement, defense attorney John Dowd insisted there was nothing incriminating about the calls, only "a lot of self-promotion and gibberish. ... Just a lot of drama."
But the government says it was more than just trash talk.
Prosecutors have twice played a tape of a July 29, 2008, telephone call in which Rajaratnam grills former Goldman Sachs board member Rajat Gupta about whether the board had discussed acquiring a commercial bank or an insurance company.
"Have you heard anything along that line?" Rajaratnam asked Gupta.
"Yeah," Gupta responded, "This was a big discussion at the board meeting."
Prosecutors sought to maximize the impact of the Gupta tape last week by calling Goldman Sachs CEO Lloyd Blankfein to testify that the phone call violated the investment bank's confidentiality policies. Gupta, who has not been charged, has denied any wrongdoing.
The government also has played tapes of Rajaratnam it says proves he was trading secrets with fellow hedge fund manager Danielle Chiesi, who has pleaded guilty in the case. The two could be heard bantering like a loving couple, praising his prowess as "Mr. October," calling him "baby" and signing off with an, "I love you."
One exchange mixes finance with flirtation.
"I mean I think this stock could go up $10 you know? But we got to keep this radio silence," Rajaratnam said.
"Oh please. That is my pleasure," Chiesi responded.
"Not even to your little boyfriends, you know?"
"No, believe me _ I don't have friends."
On another tape, Rajaratnam's trader brother drops the F-bomb twice while prosecutors say he was fretting over a newspaper article he feared may have blown an inside transaction. "Can't catch a break," the brother says.
The calls also reveal a cozy alliance between Rajaratnam and Rajiv Goel, a top Intel executive-turned-cooperator.
Goel kicked off one conversation jokingly asking for Rajaratnam to get him a new job. In another, he said he was calling "just to say you're a good man."
Rajaratnam later chuckled and responded, "You're a good guy too. When I see you I'll give you a kiss on the cheek."
During Goel's testimony, he was pressed on cross-examination about whether he thought Rajaratnam was joking about kissing him.
"I hope he was _ otherwise I had him figured out all wrong," he responded, drawing a rare moment of laughter in the courtroom.
Both Goel and former financial consultant and admitted tipster Anil Kumar testified that they had vacationed with Rajaratnam. Kumar testified that Rajaratnam once paid him a secret $1 million bonus for a tip that earned $20 million in 2006.
Kumar also described how Rajaratnam mixed business with pleasure: While the pair sat on deck chairs at the beach outside Rajaratnam's Miami condo in 2009, he said, the hedge fund manager took a phone call on the beach with a tip that Cisco would be buying another company _ information Kumar traded on using his laptop.
Kumar testified that Rajaratnam then foreshadowed their arrests a week later by confiding that he had been told to be "really careful" because one of his former employees was wearing a wire. He advised Kumar to take precautions by using prepaid phones that would be hard for investigators to track. He said he was "really disappointed" when he learned of it.
"I can't believe he is doing that and betraying me," Kumar quoted Rajaratnam as telling him.