New York, Nov 13: A former senior executive of Goldman Sachs pleaded guilty Wednesday to insider trading in connection with a scheme to use embargoed news of the US Treasury to make quick profits in the bond market. John Youngdahl, a former vice president and senior economist at Goldman Sachs, also agreed to pay USD 240,000 to settle civil charges based on the same allegations, that he bought 30-year treasury bonds based on an illegal tip that the Treasury Department would discontinue selling them.
News that the treasury had changed its policy and would stop selling the long-term bonds sparked the largest single-day rally in the history of the US bond market.
The criminal charges were filed by the US Attorney's office for the southern district of New York and the Securities and Exchange Commission brought the civil charges.
"The sanctions Mr. Youngdahl has agreed to in our civil action, and his guilty plea, send a clear message," said Stephen Cutler, director of the SEC's Enforcement Division.
"If we catch you trafficking in or trading on confidential information that could affect the market for any security, you will pay a substantial price. This is true whether the securities are stocks or bonds, and it's true whether the securities are issued by the federal government or by a public company."
Bureau Report