(Bloomberg) — A former McKinsey & Co. partner who pleaded guilty to insider trading on a Goldman Sachs Group Inc. acquisition said conflicts of interest and mistakes by his defense lawyers merit his release from prison.
(Bloomberg) — A former McKinsey & Co. partner who pleaded guilty to insider trading on a Goldman Sachs Group Inc. acquisition said conflicts of interest and mistakes by his defense lawyers merit his release from prison.
Puneet Dikshit, who is currently serving a two-year sentence, said in a May 30 Manhattan federal court filing that he received a particularly harsh penalty because his lawyers at the law firm Kramer Levin Naftalis & Frankel failed to highlight his immediate remorse over his conduct and earlier efforts to turn himself in.
According to Dikshit, 42, this was partly because the lead prosecutor in his case, Joshua Naftalis, is the son of Kramer Levin name partner Gary Naftalis. Kramer Levin lawyers showed deference to Joshua Naftalis, who sometimes worked out of the firm’s offices and had “much greater than normal access to and influence over the law firm and the defense counsel,” Dikshit said.
His petition for release, in which Dikshit is representing himself, is a longshot. But his filing paints a picture of an insider trader’s gnawing fear as well as the close ties between Manhattan federal prosecutors and the white-collar defense bar.
Read More: Ex-McKinsey Partner Gets 2 Years for Trading on Goldman Deal
The Manhattan US attorney’s office, which prosecuted the case, declined to comment on Tuesday. But the government in a Monday court filing called Dikshit’s petition “wholly without merit.” Prosecutors said in the filing that Dikshit was an active participant in his own defense and that there was strong evidence that he was fully aware of the relationship between the Naftalises.
Dikshit was sentenced last year after admitting in December 2021 that he bought short-term options on GreenSky Inc. while leading a McKinsey team advising Goldman on its acquisition of the financial technology company. According to prosecutors, he made around $450,000 on his illegal trades.
The former consultant said he quickly regretted his conduct and contacted another law firm, Ford O’Brien, four days later to explore reporting himself to the Securities and Exchange Commission.
“This has been the worst, most irresponsible decision I have made… I have destroyed my future and that of my family… hence I am thinking of just going to them,” Dikshit said he wrote to lawyers at Ford O’Brien in October 2021.
‘The Harshest’
He said he went to Kramer Levin after the Ford O’Brien lawyers strongly discouraged him from turning himself in. Dikshit said he was arrested before he could take action.
Though his Kramer Levin lawyers had been supportive of his desire to self-report, Dikshit said they failed to raise it during his sentencing and didn’t challenge prosecution statements suggesting he only sought to turn himself in after he knew that he was under investigation.
This “resulted in the court getting an unfavorable, one-sided, and untrue perception of the petitioner and his offense conduct and his subsequent actions,” Dikshit said. The judge then gave him “one of the harshest, if not the harshest” insider-trading sentences in years.
Joshua Naftalis was also the lead prosecutor in the recent insider-trading trial of former Goldman banker Brijesh Goel. During closing arguments in that case, Gary Naftalis showed up to watch his son. Goel was found guilty last week after only a few hours of jury deliberations.
The case is US v Dikshit, 21-cr-0076, US District Court, Southern District of New York (Manhattan).
(Updates with prosecutors declining to comment and recent court filing in fifth paragraph.)
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