Legal

SEC Charges Former Goldman Employee With Insider Trading

Harriet Davies Editor - Family Wealth Report 22 September 2011

SEC Charges Former Goldman Employee With Insider Trading

The Securities and Exchange Commission has charged a former Goldman Sachs & Co employee and his father with insider trading, alleging the duo used confidential information on Goldman’s trading strategies.

The SEC Enforcement division alleges that Spencer Mindlin, while working on the Wall Street bank’s ETF desk, acquired non-public details about a plan by the bank to buy large amounts of securities underlying the SPDR S&P Retail ETF. He then tipped off his father Alfred Mindlin, a certified public accountant.

The insider trading took place between December 2007 and March 2008, according to the Commission’s order instituting proceedings. Goldman was the largest institutional holder of the fund, to allow its customers to short it, and shorted the individual securities underlying it to hedge its long position.

Shortly after Spencer Mindlin began working on the ETF desk, he and his father began buying and selling the four underlying securities, placing nearly all of their trades through a brokerage account in the name of another family member. Spencer Mindlin did not then disclose the trading to his employer.

The pair made “at least $57,000” in profits through their trades, the authorities allege.

“We are aggressively working to identify and prosecute illegal insider trading across multiple markets and derivatives products regardless of the complexity of the trading pattern that we have to unravel in our investigations,” said Sanjay Wadhwa, associate director of the SEC’s New York regional office and deputy chief of the market abuse unit.

 

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