NRI Charged over $450K insider trading in the US


An Indian-origin partner in a global consulting firm has been arrested and charged in an alleged insider trading scheme that netted him about $450,000…reports Asian Lite News

“Puneet Dikshit has been charged with serious felonies for his alleged conduct” of exploiting insider information about a pending acquisition, New York Federal Prosecutor Damian Williams said on Wednesday.

He was produced before Federal Magistrate Judge Kevin Fox, who set a bail of $1 million.

NRI Charged over $450K insider trading in the US

According to a LinkedIn profile, he worked for McKinsey & Company, one of the largest global consulting firms.

Court papers said that Dikshit’s company had been hired by Goldman Sachs to advise it on the acquisition of GreenSky, a company traded on the NASDAQ stock exchange, and that he had used insider information to trade options on that company’s stocks.

After making some small trades, he bought call options – which are essentially bets on the stock prices going up – in accounts in his and his spouse’s name for about $24,647 about two days before the Goldman Sach’s announcement on September 15 that it was acquiring GreenSky in a $2.24 billion deal, according to court papers.

After the announcement when the stock prices shot up, he sold the call options at a profit of 1,829 per cent, netting about $450,000, court papers said.

“Dikshit now faces significant federal charges, which should serve as a warning to others considering similar conduct,” said Michael J. Driscoll, the assistant director of the Federal Bureau of Investigation.

Dikshit, 40, is facing two separate charges, each of which carries a maximum prison sentence of 20 years.

Besides the criminal case filed by the prosecutor, he is facing a civil case launched by the Securities and Exchange Commission seeking monetary penalties.

The lure of easy money from insider trading, using confidential information to manipulate stock prices or make a profit, has been the undoing of several leading figures in the US world, among them several people of Indian origin.

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The most famous among them to get entangled in insider trading is Rajat Gupta, who was the first foreign-born person to head McKinsey.

He was sentenced to two years after being convicted of insider trading in 2012 and spent about a year and a half in prison and the rest of the term under house arrest.

Anil Kumar, a senior partner and director at McKinsey, who was involved in the same case turned approver and testified against Gupta. He was sentenced to two years of probation.