US federal regulators announced on Tuesday that two Spanish investors were charged with insider trading as they tried to capitalise on BHP Billiton Ltd's recent bid to takeover Canadian firm Potash Corp of Saskatchewan.

The Securities and Exchange Commission (SEC) said that Juan Jose Fernandez Garcia and Luis Martin Caro Sanchez illegally earned $US1.1 million when they betted that Potash's stocks would move higher.

Mr Garcia used to be a chief researcher for Banco Santander and the bank is currently advising BHP on the deal, giving him enough access to information, which the SEC had alleged he utilised in placing his bets.

BHP Billiton, presently the world's biggest mining firm, dangled its hostile offer of $US38.5 last week to acquire Potash Corp, which in turn is the world's biggest producer of fertiliser.

Analysts said that BHP is positioning itself for the expected agricultural boom in the next few years and purchasing the Canadian company would be a wise investment for the anticipated higher demand for potash.

The SEC said that Mr Garcia and Mr Sanchez invested $US61,000 a few weeks ago on contracts that gave them access to Potash stocks at a pre-determined price, banking that a windfall would come due to the impending BHP proposal that the two were aware of.

Indeed the windfall came in the form of $US1.1 million when BHP formally announced its takeover bid but the investors failed on their attempts to transfer the money to Madrid, Spain, where the two are residents.