DOJ pushes for prison sentence for insider trader involved in Goldman/GreenSky deal
The Department of Justice (DOJ) is pushing for a prison sentence for Puneet Dikshit, an insider trader who profited from Goldman Sachs’ acquisition of Greensky. This is made apparent in a sentencing submission, seen by FX News Group.
The sentencing of Dikshit is scheduled for March 30, 2022. Dikshit has pleaded guilty to one count of securities fraud in connection with an insider trading scheme. The DOJ says a sentence of imprisonment within the applicable Guidelines range of 30 to 37 months would be sufficient but not greater than necessary to comply with the purposes of sentencing.
The defendant Puneet Dikshit was a partner in McKinsey, the global management consulting firm. There, he led McKinsey’s unsecured lending practice in North America, advising lenders, acquirers, fintechs, and networks relating to payments and consumer finance.
Between approximately November 2019 and July 2020, and again between approximately April and September 2021, Goldman Sachs engaged McKinsey to provide consulting services in connection with Goldman Sachs’ potential and actual acquisition of GreenSky, a publicly traded, financial technology company. McKinsey’s work for Goldman Sachs included conducting due diligence on GreenSky and providing anticipated post-acquisition integration consulting services.
Dikshit was one of the lead McKinsey partners responsible for this engagement. Dikshit thus had access to maternal nonpublic information (“MNPI”) about the Goldman Sachs-GreenSky transaction, including that (a) Goldman Sachs was seeking to acquire GreenSky, (b) GreenSky had accepted Goldman Sachs’ acquisition proposal on September 9, 2021, (c) Goldman Sachs had retained McKinsey on September 13, 2021 to help integrate GreenSky into the bank after the transaction closed, and (d) the general timing of the public announcement of the transaction, which ultimately took place on September 15, 2021.
Between July 26, 2021 and September 15, 2021 – at the same time that he was leading the McKinsey team advising Goldman Sachs on the GreenSky acquisition – Dikshit engaged in an egregious insider trading scheme. He misappropriated MNPI about the transaction that he had learned through this engagement, and in violation of duties that he owed to both Goldman Sachs and McKinsey, and used that information to trade GSKY call options.
At various times between July 26, 2021 and September 13, 2021, Dikshit purchased and sold relatively small numbers of GSKY call options, which had expiration dates weeks or months from the time of purchase. However, in the two days before the September 15, 2021 public announcement that Goldman Sachs would be acquiring GreenSky, Dikshit sold all of these longer-dated GSKY call options and purchased approximately 2,500 out-of-the money GSKY call options that were due to expire just a few days later, on September 17, 2021.
After the deal was announced, Dikshit sold these call options and realized illegal profits of approximately $450,000. Dikshit engaged in these illegal transactions at times minutes after talking to his client Goldman Sachs, in both his and his wife’s brokerage accounts and at times using his McKinsey-issued computer.
In light of these facts, the DOJ says, a sentence of imprisonment within the applicable Guidelines range is necessary to reflect the seriousness of Dikshit’s crime, afford just punishment, promote respect for the law, and deter corporate advisers in positions of trust from stealing client secrets and breaking the law for personal gain.