WASHINGTON: The US markets regulator Tuesday accused Rajat Gupta, a former board member of Goldman Sachs and Procter & Gamble, of insider trading related to the Galleon hedge fund scandal.

The Securities and Exchange Commission announced insider trading charges against Gupta, a Connecticut-based business consultant, "for illegally tipping Galleon Management founder and hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings at both firms as well as an impending $5 billion investment by Berkshire Hathaway in Goldman."

The SEC alleged that Gupta, a friend and business associate of Rajaratnam, provided him with confidential information learned during board calls and in other aspects of his duties on the boards of Goldman and P&G.

Rajaratnam used the inside information to trade on behalf of some of Galleon's hedge funds, or shared the information with others at his firm who then traded on it ahead of public announcements by the firms, the SEC said.