A former Goldman Sachs board member has been accused of feeding insider trading tips to a fund manager. In the wake of the financial crisis, there has been increased scrutiny placed on those in the financial services industry, so the board member is facing federal charges for the alleged crime. As the case proceeds in New York, though, it is said that the board member's relationship with the fund manager was entirely "above the board."
The board member is charged on one count of conspiracy to commit securities fraud, as well as five counts of securities fraud for the supposed communications with the fund manager. However, there is no apparent, conclusive proof that any insider trading actually occurred in relation to supposed tips provided. Documented communication between the two men consists primarily of pleasantries and some discussion on rumors and items that were already reported by the media.
Whether or not the fund manager may have done something wrong, it does not substantially clear that this Goldman Sachs board member contributed to any wrongdoing.
The board member himself has not been accused of, or found to be involved in, any inside trading himself or of receiving any sort of payment for sharing inside company secrets. It is said that the prosecution in this federal case in New York has taken a series of unconnected, innocent circumstances and tied them together to portray the board member as a guilty party.
White collar crime cases often deal with information that is often vague and may be construed to appear as though federal financial regulations have been violated. Nevertheless, federal charges of fraud and insider trading, such as these, can understandably have serious consequences. As such, the accused man and his legal representatives will likely focus their attention on every detail of the evidence provided by the prosecution. Any inconsistencies in the evidence -- or a lack of definitive proof -- may come forward as the evidence is examined. Any revelation of this sort could lead to a fair and favorable resolution of the federal criminal proceedings.
Source: The Associated Press, "Trial of ex-P&G, Goldman board member starts in NY," Larry Neumeister, May 21, 2012