McKinsey partner is charged with insider trading tied to Goldman Sachs’ acquisition of GreenSky

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  • Puneet Dixit, a 40-year-old McKinsey partner, took advantage of information received about a pending acquisition of his client Goldman Sachs to buy profitable call options in GreenSky, according to a complaint sealed Wednesday in federal court.
  • Dixit was fired by McKinsey and faced two counts of securities fraud, each carrying a maximum prison sentence of 20 years.
  • While Dixit may be the most high-profile person implicated in the GreenSky episode, it is likely that others had access to trade and deal in information, according to people with knowledge of the situation.

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a McKinsey The partner was arrested on Wednesday following a criminal charge of insider trading prior to Goldman Sachs’ recent acquisition of fintech lender GreenSky for $2.2 billion.

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A 40-year-old McKinsey partner, Puneet Dixit, took advantage of information received about a pending acquisition of his client Goldman Sachs to buy profitable call options in GreenSky. Grievance Closed Wednesday in federal court.

The executives alleged that Dixit was instrumental in advising Goldman on the deal, buying small amounts of options in the months prior to the transaction. Upon learning that a deal was imminent, however, Dixit bought approximately 2,500 call options in the two days before September 15. Announcement, as per the complaint. America alleges that he eventually earned about $450,000 through trades made in accounts at an unnamed commission-free brokerage.

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This is the latest instance in which a highly compensated professional allegedly succumbed to the temptation to trade material non-public information. Former McKinsey CEO Rajat Gupta was convicted of insider trading in 2012 and spent two years in prison. According to recruiters, consultancy partners can earn more than $1 million in total annual compensation.

While Dixit may be the most high-profile person implicated in the GreenSky episode, it is likely that others had access to trade and deal in information, according to people with knowledge of the situation. In September, CNBC was the first to report that there were suspicious trades in GreenSky options in the weeks leading up to the deal.

Dixit is facing two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison, the Justice Department said in a release Wednesday.

McKinsey said in a statement to CNBC that he was fired by his employer. Dixit’s lawyers at Kramer Levin did not immediately respond to requests for comment.

“We have terminated the employment of a partner for a gross violation of our policies and code of conduct,” McKinsey said in a statement. “We have zero tolerance for the appalling behavior described in the complaint, and we will continue to cooperate with the authorities.”

A spokesman said Goldman said it was “deeply disappointed by the allegations of insider trading” and was cooperating with the investigation.

Officials alleged that despite being a senior advisor on financial transactions, Dixit’s browser history on a McKinsey computer indicated he had basic questions as he researched his business.

According to the complaint, on September 14, Dixit Googled “what happens to options on acquisition of the company”.

While Dixit failed to obtain pre-approval for GreenSky trades, in late September, he attempted to retroactively approve his trades after CNBC publicized suspicious activity, the complaint detailed.

Last Google search listed in complaint: In early October, Dixit ran searches related to insider trading conviction Rajat Gupta.

This story is developing. Please check back for updates.

With reporting from CNBC’s Jim Forkin and Dan Mangan.

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