Goldman hit by insider trading
Goldman Sachs has built itself into a global dealmaking force whose bankers are often stitching together the biggest and most sensitive corporate transactions. But a trio of charges in just the last 18 months has threatened to tarnish that standing.
Goldman Sachs has built itself into a global dealmaking force whose bankers are often stitching together the biggest and most sensitive corporate transactions.
But a trio of charges in just the past 18 months has threatened to tarnish that standing.
Bryan Cohen, a Goldman investment banker in New York, was arrested on Friday over allegations of insider trading, court records show.
It comes just months after another banker was sentenced to three months in prison for sharing illicit deal tips. A third pleaded guilty last year to leaking information to a National Football League linebacker in exchange for tickets to games.
Such accusations strike at the sanctity of the business where corporate titans seek out the advice of large investment banks to navigate discussions over deals that can move billions of dollars in market prices.
The allegations highlight the struggles of even top-tier banks in trying to successfully clamp down on such misconduct.
Cohen, a vice-president, leaked non-public information for almost three years in exchange for cash as part of an international insider trading scheme that led to $2.6m in illicit gains, according to a separate complaint from the Securities and Exchange Commission that did not identify his employer.
A Goldman spokesperson confirmed Cohen was an investment banker who worked in the consumer retail division. The bank was unaware of the allegations until Cohen was arrested. He has been placed on leave and has been released on a $250,000 bond.
“We are co-operating with the authorities,” Nicole Sharp, a representative for the firm, said in an e-mailed statement.
“Protecting client confidential information is our highest internal priority and we condemn this alleged behaviour.”
An attorney representing Cohen, declined to comment.
Cohen shared the information with a trader who has not been identified and who subsequently passed it on to George Nikas, who realised the gains, according to the complaint. Nikas, a New York restaurateur who owns the chain GRK Fresh, was also charged. Cohen expected and received an unspecified amount of cash in exchange for the tips he provided, the filings show.
The complaint offers a detailed view of how the alleged scheme unfolded. Minneapolisbased dining chain Buffalo Wild Wings contacted Goldman October 17 2017 for help as it had been approached by Arby’s Restaurant Group.
Cohen was made aware of the potential acquisition the same day. Nikas purchased 22,000 Buffalo Wild Wings shares between October 20 and October 27 2017 for $2.5m, selling 9,000 of them by November 1 for an initial profit of $79,074.
After the market close on November 13, news broke of a potential Buffalo Wild Wings acquisition. The next day, the restaurant chain’s stock rose 24%, and Nikas sold the rest of his shares for a $343,298 profit, according to the complaint.
Nikas was indicted on October 7 along with a friend, Telemaque Lavidas, on charges they conspired to steal information about Ariad Pharmaceuticals from Lavidas’s father, who served on the company’s board until 2016, according to court documents unsealed on Friday. Takeda Pharmaceutical agreed to buy Ariad, a maker of cancer drugs, for $4.66bn in 2017.
Nikas did not immediately respond to a message seeking comment. /With Chris Dolmetsch /Bloomberg