Former Goldman Compliance Officer Busted For Insider Trading

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by Tyler Durden
Thursday, Sep 30, 2021 - 05:10 PM

Is it just us, or are we starting to see a pattern here?

After a former UBS compliance officer was jailed after being convicted of an insider trading scheme in the UK, yet another compliance officer - this time, working for Goldman Sachs - has been swept up in another insider trading scandal, this time in the US.

The SEC complaint filed on Wednesday accused Jose Luis Casero Sanchez, 35, who worked for Goldman as a senior compliance analyst out of the bank's office in Warsaw, of earning more than $471,000 from the trades.

His role as a compliance analyst gave him access to "highly sensitive" information linked to mergers and other deals between September 2020 and March 2021. Sanchez allegedly "abused that position of trust" by making at least 45 trades based on confidential information gleaned through his position at Goldman.

Some of the companies Sanchez allegedly traded in include pet retailer Petco Health and Wellness, US-headquartered Norwegian Cruise Line and the British company GW Pharmaceuticals, per court documents.

Joseph Sansone, chief of the SEC's market abuse unit, said in a statement the agency had "exposed gross violations of duty by a compliance professional who exploited the sensitive information he was hired to protect." Sanchez allegedly restricted the size of his trades and used four separate US-based brokerage accounts under his parents' names to try and avoid detection.

Both Sanchez and his parents are believed to be living in Spain, according to the FT.

While Goldman wasn't named in the complaint - it referred instead to a "prominent United States-based investment bank", the firm confirmed to the FT that Sanchez was a Goldman employee.

Goldman, which has always held its compliance officials in the highest regard, as the bank's involvement in the 1MDB scandal made clear, said in a statement that "we condemn this egregious behavior and are fully co-operating with the SEC," Goldman said.

Sanchez didn't respond to the FT's requests for comment, but as the FT points out, a recent study by a transnational cabal of academics estimated that instances of insider trading happen 4x more frequently than prosecutions.

Another recent report - this one by Bloomberg - appeared to show that insider trading is alive and well, and has even taken on a dint of respectability - so long as it's the real "insiders" who are doing the trading.

Perhaps Sanchez would have managed to avoid this trouble with the SEC if he had been a CEO, not a senior compliance analyst.