Rajat Gupta Arrested On Insider Trading (GS, BRK-A, PG)

Ex-Goldman Sachs (NYSE: GS) board member Rajat Gupta has been arrested on an insider trading case, giving hedge fund manager Raj Rajaratnam information that's been deemed illegal.

Rajaratnam, who managed the Galleon fund, made over $900,000 in profits after Gupta tipped Rajaratnam off over the investment Berkshire Hathaway (NYSE: BRK-A) made in Goldman Sachs.

Berkshire made a $5 billion investment in Goldman during the financial crisis of 2008.

In addition to the investment, Gupta told Rajaratnam about a better than expected earnings report from Goldman, as well as a worse than expected earnings report from Goldman. Rajaratnam received information about a weaker than expected fourth quarter in 2008, as well as a better than expected second quarter in 2009.

Gupta also gave Rajaratnam a heads up on Procter & Gamble (NYSE: PG) reporting bad numbers in January 2009. Rajaratnam sold short shares of P&G, and made over $570,000 in profits from this trade.

Gupta was a direct investor in the Galleon Funds.