Ex-McKinsey partner faces prison sentence after securities fraud plea

22 December 2021 Consultancy.uk 2 min. read
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A former McKinsey & Company partner pleaded guilty to insider trading, one month after his arrest. Puneet Dikshit was accused of trading in GreenSky options, while advising Goldman Sachs on the bank’s planned purchase of the FinTech.

In September 2021, a definitive agreement was announced which would allow Goldman Sachs to acquire GreenSky, a large FinTech platform for home improvement consumer loan originations. The all-stock transaction was valued at approximately $2.24 billion.

Months later, Puneet Dikshit was after being charged with insider trading relating to the deal. Dikshit was reported by CNBC to have played a key role in advising Goldman on the deal. The Canadian news broadcaster first flagged suspicious trades around the Goldman-GreenSky deal, and noted it as the “latest example of a highly compensated professional allegedly succumbing to the temptation to trade off material non-public information.”

Ex-McKinsey partner faces prison sentence after securities fraud plea

A complaint unsealed in a federal court in Manhattan, New York, alleged that between November 2019 and July 2020, and again between April and September this year, “the Investment Bank (Goldman) engaged the Consulting Firm (McKinsey & Company) to provide various consulting services related to its consideration of an acquisition of GreenSky and the post-acquisition integration of GreenSky”. The statement said Dikshit was one of the McKinsey partners leading Goldman’s engagements to acquire Greensky, and as such he had access to “material, non-public information.”

Dikshit was accused in the statement of misappropriating that information, and, “in violation of the duties that he owed to the Investment Bank and the Consulting Firm, used to trade GreenSky call options”. Following reports noted Dikshit carried out this trading between July and September 2021, while still leading the team that was advising Goldman – netting over $450,000 in the process.

The case was handled by the Justice Department’s securities and commodities fraud task force, with support from the Securities and Exchange Commission and the FBI. A month after his arrest, this mounting evidence saw Dikshit plead guilty to one count of securities fraud, which brings a maximum prison sentence of 20 years. He is set to be sentenced in March.

Dikshit is not the first McKinsey partner to have fallen from grace in this manner. In 2012, former McKinsey CEO Rajat Gupta was also convicted of insider trading, before being sentenced to two years in prison.