US accuses McKinsey partner of insider trading in Goldman’s purchase of GreenSky
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NEW YORK, Nov. 10 (Reuters) – A partner at consulting firm McKinsey was charged with insider trading on Wednesday before Goldman Sachs Group Inc (GS.N) agreed to buy fintech lender GreenSky Inc (GSKY.O ) for $ 2.24 billion, U.S. prosecutors said.
Puneet Dikshit, 40, of Manhattan, faces two counts of securities fraud after allegedly generating about $ 450,000 in profits on 2,500 GreenSky calls he bought in the two days before the announcement of the merger on September 15.
Authorities said Dikshit led McKinsey’s unsecured lending practice in North America and had been a senior partner advising Goldman. The United States Securities and Exchange Commission has filed related civil charges.
McKinsey said he fired Dikshit for “a flagrant violation of our policies and our code of conduct. We have zero tolerance for the appalling behavior described in the complaint and we will continue to cooperate with the authorities.”
Dikshit was arrested Wednesday morning and the bail was set at $ 1 million when he initially appeared before a federal judge in Manhattan. Lawyers for the defendant did not respond to requests for comment.
GreenSky is a specialty lender that arranges consumer loans for large one-time purchases such as home renovations, cosmetic surgery, and dental implants.
Its share price rose 53% on the day the merger was announced and had been volatile the three previous trading days when options trading was particularly busy.
Prosecutors said Dikshit bought his call options, a bet the share price would rise, without receiving McKinsey’s prior approval, and sold them shortly after the merger was announced.
They also said that following media reports of suspicious option trades, Dikshit requested permission to trade GreenSky, which he was denied.
Goldman has not been charged or charged with wrongdoing.
The charges were announced nine years after former McKinsey chief and Goldman director Rajat Gupta was convicted of insider trading for passing on advice on the Wall Street bank, including a pending investment from Berkshire Hathaway Inc (BRKa.N) by Warren Buffett.
Prosecutors said Dikshit Google searched for Gupta’s conviction about three weeks after Goldman agreed to buy GreenSky.
Business is US v. Dikshit, US District Court, Southern District of New York, No. 21-mj-10772; and SEC c. Dikshit in the same court, No. 21-09289.
Reporting by Jody Godoy and Jonathan Stempel in New York Editing by Will Dunham and Matthew Lewis