Goldman Sachs has been drawn into the Galleon Group insider trading case amid allegations that Raj Rajaratnam was tipped off about Berkshire Hathaway's September 2008 capital injection by one of the embattled investment bank's own board members.
Rajat Gupta, who has sat on Goldman's boards since 2006, is said to have told Mr Rajaratnam about Berkshire's $5bn (£3.25bn) investment before it was made public.
Mr Rajaratnam faces a litany of charges for his alleged leadership of an insider trading ring that made bets on companies including Goldman and IBM using non-public information.
The allegations, made in the Wall Street Journal, create yet more on heat on Goldman, as it continues to hotly contest civil fraud charges from the Securities and Exchange Commission, and as the political mood against it continues to worsen.
Gordon Brown, the Prime Minister, said any bank found guilty of wrongdoing should be forced to pay out millions of dollars in compensation.
"If what happened at Goldman Sachs and in any other bank is proven to be wrong, then hundreds of millions of dollars in compensation should be paid to British banks, and because we are the biggest shareholder in many of them, to the British taxpayer," said Mr Brown.
Royal Bank of Scotland, in which the British taxpayer owns an 83pc stake, lost $840m in connection with the Goldman derivatives package which is the subject of the SEC charges.
Goldman declined to comment on the allegations surrounding Mr Gupta, the former head of consultancy firm McKinsey & Co., who is due to step down from the bank's board next month.
The bank was first linked to the Galleon probe last week, when court papers regarding the case disclosed that Mr Rajaratnam obtained insider information on the bank.
The Journal reported that Mr Gupta – who is not mentioned in any publicly available court documents – had been interviewed by Goldman's in-house lawyers and denied any wrongdoing. However the newspaper went on to say that Mr Gupta had been told by government prosecutors that conversations between him and Mr Rajaratnam had been captured through a wire-tap on the hedge fund manager's phone.
The revelations came as one of Berkshire Hathaway's board members said that Warren Buffett – who spearheaded the $5bn in Goldman alongside a $5bn institutional placing in September 2008 – was not phased by the SEC's fraud allegations. Thomas Murphy, a Berkshire director, told Bloomberg that the 'Sage of Omaha' is "comfortable" with his stake in the investment bank, and said "he's not concerned with the investment at all".
Meanwhile, it emerged that the Senate committee that will next week question Fabrice Tourre – the Goldman trader also subject to the SEC's fraud charges – requested his presence on April 5, 11 days before the SEC's charges were made public.
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