Sentence of former Goldman Sachs investment banker causes legal deadlock
Several months after former Goldman Sachs banker Bryan Cohen was sentenced for insider trading, the execution of his sentence has created confusion and a potential legal impasse.
Let’s recall that, as per judgment delivered on June 9, 2020, Cohen was sentenced to imprisonment for a total term of time served, as well as to supervised release for a term of one year. The defendant has to complete 1,500 hours of community service that helps the neediest and most vulnerable segment of the US population.
On October 8, 2020, the counsel for Mr Cohen informed the New York Southern District Court that Mr Cohen whose immigration status in the United States has expired, was recently directed by the United States Citizenship and Immigration Services (USCIS) to voluntarily remove himself from the United States no later than October 24, 2020.
The defense is concerned that immigration authorities could arrest and detain Mr Cohen for failing to obey their directives.
A day later, the Court replied that permitting the defendant to leave the US before completing his community service and home detention would vitiate the very purpose of the sentence. At sentencing, this Court expressly rejected the defendant’s request to serve his home confinement and perform community service in France.
Accordingly, the US Attorney’s Office has been directed to meet and confer with USCIS and provide a report to the Court by October 15, 2020.
On October 10, 2020, the defense team replied to the Court’s order by stating:
“We fully recognize and respect your Honor’s rejection of Mr. Cohen’s request to serve community service and home detention in France and, as we have noted, Mr. Cohen remains fully committed to complete his sentence in the United States. Unfortunately, we could not find a legal basis for him to lawfully complete the remainder of his sentence without breaching the special conditions of supervised release as well as violating various immigration laws”.
Let’s recall that Cohen had access to material, nonpublic information (MNPI) relating to corporate transactions, and was under duties and obligations to keep that MNPI strictly confidential. He previously worked in the London office of Goldman, and later transferred to its New York office.
Despite his duties to keep the MNPI confidential, between 2015 and 2017, Cohen stole MNPI from Goldman and passed it to a securities trader based in Switzerland in order to enable the securities trader to place timely, profitable trades based on the MNPI.
Cohen informed the securities trader about corporate acquisitions and provided updates about how the deals were progressing over time. Some of the inside information that he provided related to companies whose securities were listed on United States exchanges. The information that Cohen provided ultimately resulted in substantial profits for the traders who received it and traded based on it. In exchange for providing MNPI he stole from Goldman, Cohen received benefits, including cash, from the securities trader.