Insider trading on 2 M&A deals made former Goldman Sachs compliance officer more than $77K, SEC charges

Securities Exchange Commission
The SEC has charged a former Goldman Sachs compliance officer with profiting from inside information that resulted in $471,000 in ill-gotten gains. (BCFC/Getty Images)

The Securities and Exchange Commission has charged a former Goldman Sachs compliance analyst of using confidential information to make more than $471,000 in ill-gotten gains including more than $77,000 on two deals involving at least four biopharmaceutical companies.

The suit alleges that Jose Luis Casero Sanchez made a profit of more than $70,000 by using advance information on Jazz Pharmaceuticals’ acquisition of G.W. Pharmaceuticals. Additionally, Sanchez made more than $7,000 on his purchase and sale of stock surrounding Horizon Therapeutics' acquisition of Viela Bio. The two M&A deals were announced two days apart in February of this year.

In total, Sanchez traded in advance of at least 45 corporate events involving the company’s clients, the SEC said. Sanchez’s assets as well as the accounts he used to obtain them have been frozen. 

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Using “highly sensitive information,” Sanchez “abused” his “position of trust,” using information he was paid to protect, according to the SEC, from September of 2020 to May of 2021. To avoid detection, Sanchez, a Spanish national who worked in Goldman Sachs' Warsaw, Poland office, allegedly traded in multiple U.S.-based brokerage accounts held in the name of his parents. In most cases, Sanchez made modest profits off his insider information.

One example of more-than-modest profits came from Sanchez’s purchase and sale of call options surrounding the $7.2 billion acquisition of British firm G.W. Pharmaceuticals by Jazz Pharma of Ireland. After gathering information over two months about the deal, Sanchez bought 15 call options with a $165 strike price on Feb. 1. After an announcement of the deal two days later, Sanchez sold all 15 for $70,484. G.W. Pharma was a Goldman Sachs client.

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The SEC also alleges that between Dec. 4 and 18 of 2020, Sanchez collected information about Goldman Sachs client Viela Bio. The Gaithersburg, Maryland biotech was then in talks with Ireland-based Horizon. Before the $3 billion sale became public on Feb. 1, Sanchez made two purchases of a total of 400 shares of Viela stock, which increased by 52% when the deal was made. Sanchez sold them the same day for a combined $7,009.

Sanchez also made profits from information about Petco Health and Wellness as well as Norwegian Cruise Lines. He was hired by Goldman Sachs in 2019 and quit in May, one day after he was questioned by the SEC.     

The complaint charges Sanchez with violating the antifraud provisions of federal securities laws and seeks a permanent injunction, disgorgement, prejudgment interest and a civil penalty.