Bush, in 1989, was on the board of directors and audit committee of Harken Energy when the company masked $10 million in losses by reporting a profit on the sale of a subsidiary to a group of Harken insiders borrowing money from the company itself.
The Securities and Exchange Commission ruled the transaction phony and forced the company to restate its 1989 earnings. The SEC also investigated Bush for insider trading after he sold nearly $850,000 of Harken stock shortly before its mounting debt was publicly disclosed.
The SEC eventually closed its investigation of Bush without taking action against him, although The Dallas Morning News has quoted a 1993 letter from the SEC to Bush's lawyer emphasizing that its decision "must in no way be construed as indicating that (Bush) has been exonerated."
This brief excerpt from WaPo is essentially the executive summary of the entire issue regarding Harkengate. Charles Murtaugh has the most comprehensive analysis so far, but everything you really need to know is in the excerpt above. And I predict that all supporters of Bush who try to deflect this line of inquiry (we called people like that "apologists" during the Clinton administration) will of course fail to mention paragraph 3 above.