McKinsey & Co. partner Puneet Dikshit charged with insider trades on Goldman Sachs deal
Puneet Dikshit, a 40-year-old Indian-origin partner at the noted management consulting firm McKinsey & Company, has been arrested and charged with insider trading and making illegal profits totaling over USD 450,000 in the United States. Dikshit has been charged with “illegally trading in advance of a corporate acquisition by one of the firm’s clients in September,” the Securities and Exchange Commission (SEC) said in a statement on Wednesday.
Puneet Dikshit, who was arrested on Wednesday and charged with two counts of securities fraud – violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder – faces up to 20 years in prison on each count, the Department of Justice said in a press release. US Attorney for the Southern District of New York Damian Williams and Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation Michael Driscoll announced the unsealing of the criminal complaint against Dikshit.
The SEC’s complaint further said that Puneet Dikshit Dikshit violated his firm’s policies by failing to pre-clear these options purchases.
The SEC’s complaint, filed in federal district court in Manhattan, alleges that in the course of providing consulting services, Dikshit learned highly confidential information concerning The Goldman Sachs Group Inc.‘s impending acquisition of GreenSky Inc (GSKY). According to the SEC’s complaint, in the days leading up to the acquisition announcement on September 15, 2021, Dikshit used this information to purchase out-of-the-money GreenSky call options that were set to expire just days after the announcement.
He sold all of the call options referencing GSKY on September 15, 2021, realizing profits of over USD 450,000, a return on investment of approximately 1,829 percent. The SEC’s complaint further said that Dikshit violated his firm’s policies by failing to pre-clear these options purchases. “In total, Dikshit realized profits of more than USD 450,000 from his insider trading in GSKY options, a return on investment of approximately 1,829 percent.”
“Dikshit knew or was reckless is not knowing that the information he had obtained from Consulting Firm and Goldman concerning the acquisition of GreenSky was material and nonpublic and that he owed a duty to Consulting Firm and Goldman to keep that information confidential and to refrain from trading on it,” the SEC said.
Dikshit was one of McKinsey’s partners leading these firms’ engagements. In that role, he had access to material, nonpublic information, which he misappropriated and, in violation of the duties that he owed to Goldman and McKinsey, used to trade GreenSky call options. He engaged in this trading between on or about July 26, 2021, and on or about September 15, 2021 – at the same time he was leading the McKinsey team that was advising Goldman about its potential acquisition of GreenSky.
“We allege that Dikshit breached duties to his employer and his client by misusing their confidential information for his own financial gain. Thanks to our trading analysis tools, we were able to move swiftly to hold him accountable for his actions and protect the fairness of our securities markets,” Joseph G Sansone, chief of the SEC’s Market Abuse Unit, said in a statement.
In 2012, former Goldman Sachs director and former Managing Director of McKinsey Rajat Gupta was sentenced to two years in prison after being found guilty 2012 of passing confidential boardroom information about Goldman Sachs to then hedge fund founder Raj Rajaratnam. Gupta served 19 months in prison and was released in 2016.
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