A Goldman Sachs banker is headed to federal prison after being found guilty of insider trading. Brijesh Goel was convicted in federal court in Manhattan yesterday and sentenced to three years behind bars.
The Squash Court Conspiracy
The scheme played out at the tony New York Health and Racquet Club in Midtown Manhattan. During games of squash, Goel passed tips about upcoming deals to his friend Akshay Niranjan, a Barclays trader.
Niranjan then traded using that inside information, netting about $280,000 for the both of them, according to Bloomberg.
The Sentence
Judge P. Kevin Castel lambasted Goel for lying under oath during the trial:
In handing down the sentence, the judge criticized Goel harshly for lying on the stand during the trial and for diminishing the magnitude of his misconduct in his request for leniency. ‘You took the stand right in this chair and you lied again and again and again,’ said Castel.
Goel Tries to Cover His Tracks
Goel and Niranjan’s friendship was characterized by partying and drug use. And not only did Goel give Niranjan confidential information, he also tried to cover it up:
The details of Goel and Niranjan’s close relationship, including copious drug use, regular squash matches and music festivals, heightened the drama of Goel’s trial, where Niranjan was the prosecution’s star witness against his onetime friend. Niranjan recorded conversations in which Goel asked him to delete texts about his tips, which resulted in a conviction on obstruction as well as insider-trading charges.
‘F***… This we need to delete,’ Goel said in a conversation Niranjan recorded. ‘Did we put on any trade?… It has to be deleted. I don’t even have this chat.’
Time to Pay the Piper
I always assumed Goldman investment bankers were smart. But texting about federal crimes is incredibly stupid.
In addition to his prison sentence, Goel is now on the hook for almost half a million dollars in fines and legal judgements. After he completes his sentence, he may be deported back to India.
It’s quite the comedown for a man who until recently was working one of the most lucrative jobs in finance.
NYC — Insider Trading Heaven
Living near New York City, I can see why it’s ripe for insider trading conspiracies.
Investment bankers, traders and corporate lawyers meet each other on a regular basis. Some become friends — and may be tempted to share tips.
Goel’s sentence is a positive step for fair markets. Still, many blue collar people steal far less and spend much more time behind bars.
Wrap-Up
It’s critical that we protect markets from arrogant, immoral people like Goel.
If the average person starts to think the market is rigged, he’ll pull his money out. This means less capital for business, and a worse future for everyone.
If you know about anyone insider trading, report it! It’s not right to take advantage of average investors with inside knowledge.
Do you think Goel’s sentence was fair? Leave a comment and let us know!
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