A McKinsey partner was arrested Wednesday after being charged with insider trading prior to Goldman Sachs’ recent $ 2.2 billion acquisition of fintech lender GreenSky.
A lawsuit unsealed in federal court on Wednesday alleged that Puneet Dikshit, 40, had used information gained about the impending acquisition of his client Goldman Sachs to buy profitable call options from GreenSky.
Dikshit, who played a leading role in advising Goldman on the deal, attempted to buy small amounts of options in the months leading up to the deal, authorities alleged. However, after learning that a deal was imminent, according to the complaint, Dikshit bought approximately 2,500 call options in the two days leading up to the September 15 announcement. He eventually made about $ 450,000 trading accounts with an unnamed commission-free broker, the US claimed.
It is the latest example of a highly paid professional who allegedly succumbs to the temptation to exchange essential non-public information. Former McKinsey CEO Rajat Gupta was convicted of insider trading in 2012 and served two years in prison. The consulting firm’s partners can earn total annual compensation in excess of $ 1 million, according to recruiters.
While Dikshit may be the most famous person trapped in the GreenSky episode, it is likely that others had access to business information and traded it, according to people with knowledge of the situation. CNBC was the first to report in September that there had been suspicious trades in GreenSky options in the weeks leading up to the deal.
Dikshit faces a maximum sentence of 20 years in prison in two cases of securities fraud, the Justice Department said in a press release on Wednesday.
McKinsey has fired Dikshit from his job, the company said.
“We terminated the employment of a partner because of a gross violation of our guidelines and our code of conduct,” McKinsey said in a statement to CNBC. “We have zero tolerance for the horrific behavior described in the complaint and will continue to work with the authorities.”
Goldman said it was “deeply disappointed with the insider trading allegations” and is also cooperating with the investigation, a spokesman said.
Dikshit’s lawyers at Kramer Levin did not immediately respond to requests for comment.
Although Dikshit is a senior financial transactions advisor, his browsing history on McKinsey computers suggests he had fundamental questions while researching his deals, authorities claimed.
On September 14th, according to the complaint, Dikshit googled “what happens to options if the company is acquired”.
The complaint stated that Dikshit did not get pre-approval for the GreenSky trades, but tried to retrospectively approve his trades in late September after CNBC published the suspicious activity.
The last Google search listed in the complaint: In early October, Dikshit conducted research into Gupta’s conviction of insider trading.
This story evolves. Please check again for updates.
– CNBC’s Jim Forkin and Dan Mangan contributed to this report.
