Partner at McKinsey Management Consulting Company Charged With Insider Trading

A partner at McKinsey, the world's largest consulting company, has been charged with illegal insider trading in advance of a Goldman Sachs deal with finance and technology lender GreenSky, the Securities and Exchange Commission (SEC) announced on Wednesday.

In a press release, the SEC said Puneet Dikshit, a partner at the global management consulting firm, was trading illegally in advance of a corporate acquisition by one of the firm's clients in September.

The SEC's complaint, filed in federal district court in Manhattan, alleges that Dikshit had learned "highly confidential information" pertaining to the Goldman Sachs Group Inc.'s impending acquisition of the consumer loan fintech platform, GreenSky Inc., ahead of its Sept. 15, 2021 acquisition announcement.

GreenSky is a publicly traded financial technology company that provides technology to banks and merchants to make loans to consumers for home improvement, solar, health care, and other purposes.

The complaint alleges that Dikshit, 40, from New York, used this knowledge to buy call options—financial contracts that allow the buyer to purchase assets at an agreed price on or before a particular date—before the deal was announced and sold them on the morning of the acquisition announcement, resulting in roughly $450,000 in profits.

The Department of Justice said in a statement that around November 2019, July 2020, and again between about April 2021 and September 2021, Goldman Sachs engaged McKinsey to provide various consulting services related to its consideration of an acquisition of GreenSky and the post-acquisition integration of GreenSky.

Dikshit was one of McKinsey's partners leading these engagements and his role granted him access to certain information that was not yet public, which he allegedly used to trade GreenSky call options.

The partner allegedly engaged in the illegal trading between July 26, 2021 and Sept. 15, 2021 at the same time he was leading the engagements regarding the potential acquisition of GreenSky.

Initially, Dikshit purchased and sold "relatively small numbers of GreenSky call options, which had expiration dates weeks or months from the time of purchase," but later in September 2021, he "sold all of these longer-dated GreenSky call options and purchased approximately 2,500 out-of-the-money GreenSky call options that were due to expire just a few days later."

The SEC complaint further alleges that Dikshit violated his firm's policies by failing to declare the options purchases in advance of the acquisition announcement.

The Epoch Times has contacted McKinsey and Goldman Sachs for comment.

"We allege that Dikshit breached duties to his employer and his client by misusing their confidential information for his own financial gain," Joseph G. Sansone, chief of the SEC Enforcement Division's Market Abuse Unit, said in a statement. "Thanks to our trading analysis tools, we were able to move swiftly to hold him accountable for his actions and protect the fairness of our securities market."

Dikshit was arrested early Wednesday and faces two counts of securities fraud, each of which has a maximum sentence of 20 years in prison, the Department of Justice said.

A spokesperson for McKinsey told CNBC that it has terminated Dikshit's contract for "a gross violation of our policies and code of conduct."

Additionally, Goldman Sachs said it was "deeply disappointed by the insider trading allegations" and is cooperating with the investigation.

By Katabella Roberts

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.