The charges relate to the $5bn investment made by Warren Buffett's Berkshire Hathaway vehicle in Goldman Sachs in 2008 - a deal which Gupta, as a board director, obviously knew about at an early stage. The US SEC claim that Gupta then leaked the details to his 'friend and business associate' Raj Rajaratnam, founder of the Galleon Group hedge fund, who promptly made millions trading on this inside information. It looks as though the SEC got to Gupta via Rajaratnam, who's already been charged with various counts of insider trading.
It's important to stress that the accusations against Gupta are just that - accusations. And as his lawyer was quick to point out to the BBC, nobody's accusing Gupta of actually profiting from the information (unlike the brainbox who got done for insider trading by the FSA recently). Although we're not sure this is a very profitable line of defence; after all, it merely serves to make the point that Gupta is already so rich that he doesn't need the money.
The unfortunate thing for Gupta is that the cases of this type which do get to court represent the merest tip of the iceberg. Bankers have been tipping off their most important (read: most lucrative) clients in advance of deal announcements for years, helping them to make a fast buck. There are degrees, of course; perhaps it'll just be a subtle hint, or a prod in the right direction. But it's far more common than the number of successful prosecutions would suggest.
Not that this should be any reason to go easy on the stupid/ unlucky few who manage to get caught in the act, of course…