June 2, 2023

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McKinsey Consultant Accused of Insider Trading

A previous lover at consulting firm McKinsey & Co. has been charged with investing on within facts he had received about the opportunity acquisition of GreenSky Inc. though advising the buyer about the offer.

The U.S. Securities and Trade Fee said Puneet Dikshit, who worked for McKinsey in New York, procured extremely speculative GreenSky connect with options in advance of the Sept. fifteen, 2021 announcement of the specialty lending firm’s $two.two billion acquisition by his shopper, Goldman Sachs.

With the options established to expire on Sept. 17, he cashed them in for a revenue of almost $450,000, a return of close to 1,944% on his investment, the SEC alleged in a civil criticism.

Dikshit, 40, was arrested Wednesday on parallel legal prices of securities fraud that have a maximum sentence of twenty years in jail.

“We allege that Dikshit breached duties to his employer and his shopper by misusing their private facts for his have fiscal acquire,” Joseph G. Sansone, chief of the SEC Enforcement Division’s Sector Abuse Device, said in a information release.

In accordance to the SEC, Dikshit led McKinsey’s North The us unsecured lending and digital payments company strains and was section of the group that recommended Goldman about “point-of-sale lending usually and GreenSky specially,” offering him entry to substance nonpublic facts about a attainable takeover of the loan company.

At to start with, Dikshit allegedly traded in comparatively small figures of GreenSky connect with options, acquiring some contracts right after Goldman requested people today at McKinsey, such as Dikshit, to draft a doc addressing its opportunity acquisition of GreenSky.

But in the two times promptly previous the public announcement of the offer, the SEC said, he used close to $23,a hundred on bullish options with a $ten strike value and a Sept. 17 expiration day.

Following Goldman announced its $12.eleven-per-share offer you, the inventory, which had closed at $seven.seventy seven on Sept. fourteen, jumped previously mentioned the strike value and Dikshit allegedly liquidated his options for proceeds of $449,128.

A McKinsey spokesman said Dikshit had been fired for a gross violation of the firm’s policies and code of carry out. “We have zero tolerance for the appalling habits explained in the criticism and we will go on cooperating with the authorities,” the spokesman said.

Goldman Sachs, GreenSky, Insider Buying and selling, McKinsey & Co., Puneet Dikshit, U.S. Securities and Trade Fee