Former Goldman Compliance Analyst Accused of Insider Trading

(Bloomberg) -- A former Goldman Sachs Group Inc. compliance analyst whose job was to help the bank prevent insider trading was himself charged with insider trading by the Securities and Exchange Commission.

The SEC sued Jose Luis Casero Sanchez on Wednesday, claiming he used his position in the bank’s Warsaw office to access a control room which stored confidential information on “all pending and potential transactions in which the investment bank was involved and advising clients.” He made at least $471,700 in illegal trading profits, the regulator said.

From September 2020 to May 2021, Casero Sanchez traded on information involving at least 45 Goldman clients, including Equitable Holdings Inc., Cooper Tire and Rubber Co., Norwegian Cruise Line Holdings Ltd. and Petco Health and Wellness Co., according to the SEC. 

A lawyer for Casero Sanchez could not be immediately located.

“We condemn this egregious behavior, which violates our standards of conduct and business principles. We are fully cooperating with the SEC,” Goldman spokesman Patrick Scanlan said in a statement.

Parents’ Names

Goldman was not identified in the SEC complaint, but the bank confirmed that Casero Sanchez had worked there during the relevant time period.

Casero Sanchez traded in four accounts he controlled in the names of his parents. The bank interviewed him about “certain suspicious activity” in May 2021, and a day later he resigned, according to the complaint. The agency asked a judge to freeze all of their assets in the U.S., including the illegal insider trading profits. The SEC said Casero Sanchez and his parents are Spanish citizens believed to be living in that country.

Goldman has seen a number of employees accused of insider trading in the past two years. Former investment banking vice president Bryan Cohen pleaded guilty in January 2020 to passing tips on deals. Ex-research analyst Brian Maguire was barred from the securities industry in April for twice buying stocks he learned a colleague was upgrading. Former business-conflicts analyst Mohammed Zina pleaded not guilty in June to U.K. insider trading charges.

Control Rooms

The SEC noted that Casero Sanchez’s job was to try to prevent such conduct. He was responsible “for implementing the investment bank’s policies and procedures designed to, among other things, ensure that its employees did not trade on material, nonpublic information,” the agency said. 

The Warsaw control room Casero Sanchez accessed is also part of Goldman’s efforts to combat insider trading. The bank has eight such control rooms worldwide maintaining an internal database of all its potential mergers, acquisitions and financings and managing the flow of confidential information between Goldman’s investment bankers and its sales, trading, research and investment management businesses, the SEC said.

Poland has become a magnet for global banks’ back-office and mid-office operations due to its European Union membership and relatively low labor and real-estate costs. Goldman’s Warsaw branch director said 2019 that the firm planned to have as many 1,000 staffers in the Polish capital. JPMorgan Chase & Co. also has an operations hub in Warsaw, while UBS Group AG has one in Krakow.

The case is U.S. Securities and Exchange Commission v. Casero Sanchez, 21-cv-08085, U.S. District Court, Southern District of New York (Manhattan).

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