- The Indian American was a lead at the management consulting firm and was advising Goldman Sachs on its acquisition of GreenSky, a publicly-traded financial technology company.
Puneet Dikshit, a former partner at management consulting firm, McKinsey & Company has been sentenced to two years in prison by U.S. District Judge Colleen McMahon. In addition to his prison sentence, the 41-year-old Indian American from New York was ordered to pay forfeiture in the amount of $455,017, according to a Department of Justice press release.
Dikshit pled guilty on Dec. 15, 2021, to one count of securities fraud in connection with his scheme to commit insider trading, based on material, nonpublic information regarding the upcoming public announcement that The Goldman Sachs Group, Inc. – which Dikshit and McKinsey were advising – would be acquiring GreenSky, Inc.
In the days leading up to the acquisition announcement on Sept. 15, Dikshit used inside information to purchase out-of-the-money GreenSky call options that were set to expire just days after the announcement. Following the takeover, GreenSky share prices jumped 44 percent, CNBC reported.
GreenSky was a publicly-traded financial technology company that provided technology to banks and merchants to make loans to consumers for home improvement, solar, healthcare, and other purposes. GreenSky’s common stock is traded under the symbol “GSKY” on the NASDAQ.
“With today’s sentence, Puneet Dikshit must face the consequences of his egregious crime,” said U.S. Attorney Damian Williams in the press release. “We will continue to vigorously protect the integrity of our capital markets and hold accountable those who cheat by trading on inside information. This conviction shows Wall Street and Main Street that corporate advisors who steal information entrusted to them and use it for their personal gain will be caught and prosecuted.”
According to the Department of Justice, Dikshit made illegal profits totaling over $450,000. He was privy to “highly confidential” information concerning The Goldman Sachs Group’s impending acquisition of the consumer loan fintech platform GreenSky Inc. As one of the lead negotiators in that deal, Dikshit had access to material, nonpublic information, “which he misappropriated and, in violation of the duties, and owed to the Investment Bank and the Consulting Firm used to trade GreenSky call options,” according to the SEC and DOJ press releases. These negotiations happened around November 2019 through approximately July 2020, and again between April and September this year.
At various times between July 26 and Sept. 13, Dikshit purchased and sold relatively small numbers of GreenSky call options, which had expiration dates weeks or months from the time of purchase. However, in the two days before the Sept. 15 public announcement that the Investment Bank would be acquiring GreenSky, 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, on Sept. 17. After the deal was announced, he sold these calls and realized profits of approximately $450,000.