An acquisition, rise in profits or expansion plans can sway the price of a company's stocks, but such information only remains market speculation before an official announcement. This is why anyone who is in on this data before buying shares, gets an undue advantage which needs to be addressed so that stock markets remain a level playing field.
A former Vice President at Goldman Sachs is being prosecuted for pulling off such a scam, and an IITian who is also his friend is a witness in the case.
Confidential data passed off as tips
Akshay Niranjan, the witness and Brijesh Goel the Goldman Sachs VP, are both IIT pass outs, and Goel tipped Niranjan about corporate acquisitions.
Niranjan, a trader at Barclays, was able to use this information for making profits consistently.
But he was also suspicious because Goel always exchanged information in public, and sent coded texts.
Massive profit in a single year
Niranjan adds that he also asked Goel if he is breaking the law, but the latter said he knew the rules, and that there was nothing to be worried about.
He had received tips about eight companies from Goel, and was happy with the profits until he suspected that confidential information was being leaked.
Niranjan, who met Goel in US in 2012, made $290,000 in profits on his investments in 2017, thanks to the information passed on by his friend.
But now the duo find themselves on the opposite sides in a courtroom.
