The indictment of
The charges “should send a strong message to anyone who is even thinking about committing insider trading: Cut it out,”
Goldman said it condemns such behavior and is cooperating with the Justice Department and the Securities and Exchange Commission. “The 2017 and 2018 insider trading alleged by the government is egregious conduct,” the bank said in a statement.
Hit to Reputation
The firm has seen several former employees charged with insider trading. In 2019, after a trio of charges against people who had worked at Goldman over just 18 months, the firm’s investment-banking co-heads put out a note to staff reminding them of the reputation hit suffered by the bank because of such actions.
After leaving Goldman, Goel went to work at
Prosecutors allege Goel passed along information from the bank’s Firmwide Capital Committee. The confidential committee emails contained details and analysis of mergers the bank was considering financing or deals in which it was acting as a financial adviser.
‘Let’s Play Squash’
In one instance, the US said, when Goel received an email about a potential takeover target for EQT Partners Inc., he texted his friend, “Let’s play Squash after work,” and that evening suggested that his friend buy call options in the target company. The next day, he asked by text, “Did you book the court?” Prosecutors claim this was his “coded way of asking” whether his alleged co-conspirator had purchased call options.
The SEC said Goel passed tips to a foreign exchange trader and longtime friend named Akshay Niranjan, 33, with whom he often played squash and who is a defendant in the civil case. According to the SEC complaint, Goel and Niranjan met as graduate business students in California and moved to New York together in 2013. In addition to their squash games, they frequently took overseas trips together and, at times, lived in the same apartment building, the regulator said.
Goel is also charged with obstruction of justice for allegedly destroying evidence and directing his friends to do the same. The recipient of Goel’s tips recorded meetings last month in which they discussed coordinating their story to law enforcement and deleting messages related to the alleged scheme, according to court documents.
For all the elaborate maneuvering the government alleges, the two don’t appear to have scored big sums. The SEC alleges that they made $291,735 from the scheme, including one trade that netted them no profits and another that earned them just $600. The vast majority of their profits, $250,235, came from a single trade on Calgon Carbon before it was acquired by Kuraray in 2017, according to the regulator.
“Because we have zero tolerance -- zero tolerance -- for cheating in our markets,” Grewal said.
According to his LinkedIn, Niranjan worked at
Barclays and Deutsche Bank declined to comment.
Among the others charged in the four separate cases is former Republican Congressman Stephen Buyer, who represented Indiana from 1993 to 2011. Buyer, 63, is accused of taking confidential information from two of his consulting business’s clients and trading on it.
Prosecutors allege he traded on it first in 2018 while working for T-Mobile US, when he learned that it planned to acquire Sprint, and then the next year when he learned that his client Guidehouse LLP was going to purchase Navigant Consulting. The government said he earned profits of at least $349,000.
The US said one of the accounts that Buyer used to trade was shared with a relative who lost hundreds of thousands of dollars on an investment Buyer had led the relative to make. He is also accused of sending himself reports on the companies and notes to himself to make it look like he was researching the stocks, and of lying to investigators probing the trades.
“Congressman Buyer is innocent,” Andrew Goldstein, a partner at Cooley LLP who is representing Buyer, said in a statement. “His stock trades were lawful. He looks forward to being quickly vindicated.”
Prosecutors also named Seth Markin, who they say was a
Markin is accused of looking through his girlfriend’s confidential work documents without her permission and finding out that Merck & Co. was going to acquire Pandion Therapeutics, a biotech company, for about three times the value of Pandion’s share price. Prosecutors said Markin passed on the tip to his close friend, Brandon Wong, who bought hundreds of thousands of dollars of shares of Pandion based on the information and told others, including friends and family.
‘Integrity’ of Markets
Markin and Wong pleaded not guilty during an appearance in magistrate court in Manhattan on Monday and will be released on bail pending an Aug. 24 court appearance. Their lawyers declined to comment on the charges after the hearing.
Michael Brodack, who heads the FBI’s criminal division in New York, said at the news conference that although the specifics vary, the four cases have one thing in common: They all involve people “whose greed led them to make trades” based on material, nonpublic information.
“The crimes we allege here today are serious ones that threaten both the integrity of our financial markets and investors faith on them,” Brodack said.
The criminal cases are: US v. Goel, 22-cr-396; US v. Buyer, 22-cr-397; US v. Bhardwaj, 22-cr-398; and US v. Markin, 22-cr-395; US District Court, Southern District of New York (Manhattan).
(Adds box on past Goldman employees and, in third section, Niranjan’s LinkedIn employment history.)
--With assistance from
To contact the reporters on this story:
To contact the editors responsible for this story:
© 2022 Bloomberg L.P. All rights reserved. Used with permission.