The tips generated more than $18 million in illicit profits or losses that were avoided by Galleon, the SEC said.

"Gupta was honored with the highest trust of leading public companies, and he betrayed that trust by disclosing their most sensitive and valuable secrets," Robert Khuzami, the SEC's enforcement director, said yesterday in a statement.

The allegations are "totally baseless," Gary Naftalis, a lawyer for Gupta, said in a statement. Gupta's "40-year record of ethical conduct, integrity and commitment to guarding his clients' confidences is beyond reproach," Naftalis said.

Ed Canaday, a spokesman for Goldman Sachs in New York, declined to comment. Gupta, who stepped down from Goldman Sachs's board last year, resigned yesterday from the Procter & Gamble board "to prevent any distraction," said Paul Fox, a spokesman for the Cincinnati-based consumer-products company.

"We were saddened to learn about the civil charges against our former colleague," Yolande Daeninck, a spokeswoman for McKinsey in New York, said in a statement.

Rajaratnam's Reaction

The SEC action "is simply an effort to destroy a favorable witness," said John Dowd, Rajaratnam's attorney at Akin Gump Strauss Hauer & Feld LLP in Washington. "There is no case, absolutely none."

In 1994, after his promotion to the head of McKinsey, the Chicago Tribune reported that the two people Gupta admired most were Mother Teresa and Swami Vivekananda, a 19th-century Hindu hero credited with helping make Hinduism a major world religion.

"I think of him like Thomas Aquinas," the philosopher and Catholic theologian and priest, former P&G Chief Executive Officer Alan Lafley said of Gupta in an October Fortune story.

A former McKinsey partner recalls Gupta's philosophical talks, while managing director, in which he likened the firm to a Banyan tree. As the various consulting practices grew, Gupta would say, they would strengthen the overall firm, as the Banyan's maturing roots do the tree, according to the former partner, who asked not to be named because of the case pending against Gupta.