By Nate Raymond

NEW YORK, Jan 23 (Reuters) - An FBI agent who was investigating SAC Capital Advisors portfolio manager Mathew Martoma in 2011 said the trader was just a "grain of sand" in a wider probe targeting the hedge fund's founder, Steven A. Cohen, a government witness said on Thursday.

Sidney Gilman, a doctor testifying in Martoma's insider trading trial in federal court in New York, recounted to jurors how the U.S. Federal Bureau of Investigation agent approached him in September 2011.

"The gentleman also mentioned (that) I am only a grain of sand, as is Mr. Martoma," he said. "They are really after a man named Steven A. Cohen."

While it has long been known that investigators targeted Cohen, he has not been charged criminally in the probe. He has denied wrongdoing and a spokesman declined to comment on Thursday.

Martoma, a former portfolio manager in SAC's CR Intrinsic Investors division, is one of eight current or former employees of SAC Capital Advisors to face criminal charges for insider trading.

Prosecutors accuse Martoma of using inside information obtained from Gilman, who chaired the safety monitoring committee for the Alzheimer's drug trial, to trade in Elan Corp Plc and Wyeth, now a unit of Pfizer Inc.

Although he is not a defendant, Cohen's presence has loomed over Martoma's trial. Prosecutors say that after learning about negative results of a clinical trial for an Alzheimer's drug from in 2008, Martoma called Cohen.

After the call, SAC began selling off its $700 million position in the two companies, helping it make profits and avoid losses of $276 million, prosecutors say.

SAC Capital last year agreed to pay $1.8 billion in criminal and civil settlements and plead guilty to fraud charges stemming from insider trading by its employees.

The U.S. Securities and Exchange Commission is seeking to bar Cohen from the financial industry for failing to supervise Martoma and another SAC employee.

Gilman, 81, who is testifying as a government witness under a non-prosecution agreement, gave his account during cross-examination on Thursday by a lawyer for Martoma.

The lawyer, Richard Strassberg, sought to contrast the doctor's testimony that he leaked information to Martoma, to earlier denials Gilman had made in meetings with government investigators, including FBI agent B.J. Kang, in September 2011.

Gilman said he lied to the FBI agent who first approached him in 2011 and later denied giving Martoma nonpublic information during a meeting with investigators in February 2012.

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Strassberg also asked Gilman about the non-prosecution agreement he had received in exchange for his testimony, asking if he had been afraid he would face a "long time in prison" if charged.