A former Goldman Sachs banker avoided prison time on Tuesday for his role in a global insider trading ring that generated tens of millions of dollars in profits using confidential information about multibillion-dollar takeovers.
Bryan Cohen, who worked in Goldman’s London and New York offices from 2010 until his indictment last year, was sentenced to 12 months of home detention by a federal judge in Manhattan.
The 34-year-old French national was one of a group of traders, bankers and others indicted last year by US prosecutors as they took down an insider trader ring that stretched from New York to London and Geneva.
Mr Cohen pleaded guilty in January to selling information about deals Goldman was advising on in return for bundles of cash in a scheme that involved “burner” mobile phones and code names.
Goldman, which was not accused of any wrongdoing, put Mr Cohen on leave when the charges were brought and has co-operated with the investigation. The bank fired Mr Cohen in December.
Prosecutors with the Manhattan US attorney’s office had asked for 37 months of jail time for Mr Cohen, a recommendation at the top end of the 30-37 month guideline sentence range.
Richard Cooper, an assistant US attorney, said on Tuesday that Mr Cohen’s conduct was more akin to those seen in the organised illegal drugs trade than a white-collar matter.
“They essentially used the tools of the drug trade to commit insider trading,” he said at the sentencing hearing held by teleconference, noting the use of pre-paid phones and cash payments.
Mr Cohen’s lawyer, Benjamin Brafman, said the comparison was “over the top and inappropriate”, arguing that his client had lived an otherwise exemplary life.
“This is a rather good person who throughout his life has conducted himself in a very productive and quite frankly good manner,” said Mr Brafman. He had asked that Mr Cohen be allowed to return to his native France where he would carry out 2,000 hours of community service.
Mr Brafman argued that his client was at risk of contracting coronavirus if he was imprisoned, noting that Mr Cohen developed asthma as an adult.
Mr Cohen’s offences included tipping off a Swiss trader about Monsanto and ChemChina’s $45bn-$47bn bids to buy Swiss agricultural technology group Syngenta in 2015, and Arby’s 2017 deal to buy the parent company of fellow eatery Buffalo Wild Wings for $2.3bn.
In a sentencing memo last month, Mr Brafman said Mr Cohen’s promising career in banking was finished as a result of his conduct, writing: “He has lost a profession he loved where his altruistic nature was driving him to do his best for each and every client.”
Mr Cohen was the third former Goldman employee to plead guilty to US insider trading charges over the past two years, though those previous cases similarly did not involve allegations against the bank itself.
Though William Pauley, the judge overseeing the case, called the suggestion of community service in France “unenforceable and absurd”, he rejected the government’s call for a jail sentence.
Mr Pauley noted that foreign nationals in the US are not eligible for prison camps or minimum security facilities where white-collar defendants often serve relatively short sentences.
He sentenced Mr Cohen, who has been under house arrest since he was released on bail following his arrest last October, to time served plus an additional 12 months of home confinement in the US.
The judge added 1,500 hours of community service helping the “neediest and most vulnerable”, an experience he said would show Mr Cohen how those less fortunate lived.
“There appears to be no explanation for Mr Cohen’s agreement to participate in this sordid scheme other than greed and hubris,” he said, noting that the $260,000 of illegal profits he made were less than his annual bonus at Goldman.
“Perhaps he thought he covered his tracks so well that no one would ever discover the scheme, or perhaps he was just doing it for the thrill,” the judge said.
Mr Cohen apologised for his crimes before he was sentenced, telling the judge: “I’m terribly sorry and ashamed to be here before you today . . . I’ve destroyed my life.”
The Securities and Exchange Commission also filed charges against Mr Cohen that he settled this year by forfeiting the illegal profits he made and agreeing to a lifetime ban from the financial industry.
Others indicted alongside Mr Cohen include two other former London-based investment bankers, Benjamin Taylor, who worked at boutique advisory group Moelis & Co, and Darina Windsor, who worked at private equity group Centerview Partners. Both remain at large.
A Manhattan jury returned a guilty verdict against another defendant in the case, Telemaque Lavidas, in January. Mr Lavidas is awaiting sentencing.
The Swiss trader to whom Mr Cohen sold information, Marc Demane Debih, was the star witness in Mr Lavidas’ trial after he pleaded guilty and co-operated with prosecutors.