The Securities and Exchange Commission today accused Mark Duffell, a former consultant to private equity firm Accel-KKR, of buying 65,000 shares of stock in Silicon Valley software company SumTotal Systems, while simultaneously engaging in talks to acquire SumTotal on Accel-KKR’s behalf.

Not only did this give Duffell access to confidential company information, but he would book more than a $160,000 profit when Accel-KKR announced its offer to buy SumTotal for at nearly a 90% premium. In fact, that may be a conservative number, given that Accel-KKR eventually lost a bidding war for SumTotal to a rival private equity firm (Vista Equity).

From the complaint:

Each of Duffell’s purchases of SumTotal stock alleged herein was made based on inside infonnation misappropriated from AKKR in violation ofduties oftrust and confidence owed to AKKR. Duffell knew, or was reckless in not knowing, that the information he misappropriated from his employer regarding AKKR’s interest in a possible acquisition of SumTotal was material and nonpublic. Duffell knew, or was reckless in not knowing, that he had a duty to refrain from trading on material, nonpublic information.

The SEC adds that Duffell has settled for $300,000 in disgorgement and penalties, without admitting or denying the allegations.

The SEC does not suggest that there was any knowledge of this deal elsewhere at Accel-KKR, a tech-focused growth equity and buyout firm that no longer has any formal — or financial — affiliation with either of its two namesakes (venture capital firm Accel Partners and private equity firm KKR).

What’s worth noting, however, is that Accel-KKR has not exactly cut its ties to Duffell. He may be a “former consultant” to the firm, but he also serves as the firm’s hand-picked CEO for portfolio company KANA Software (acquired for nearly $49 million in October 2009). An Accel-KKR spokesman says he remains in the role, and only would offer up the following statement:

“The SEC’s complaint makes it clear that Accel-KKR committed no wrong doing whatsoever, was unaware of Mr. Duffell’s personal trading activity, and did not profit from it in any way. While Mr. Duffell admitted no wrong doing, we understand and support his decision to settle this matter and put it behind him.”

Duffell might be a great chief executive at KANA — he once ran Epicor Software — but he also has seriously sullied the Accel-KKR brand. Why it’s deciding to stand by its man is beyond me…