Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, September 21, 2011

SEC Charges Former Goldman Employee with Insider Trading involving ETFs

The SEC charged a former Goldman, Sachs & Co. employee and his father with insider trading on confidential information about Goldman’s trading strategies and intentions that the employee learned while working on the firm’s exchange-traded funds (ETF) desk.  According to the SEC's complaint, Spencer D. Mindlin obtained non-public details about Goldman’s plans to purchase and sell large amounts of securities underlying the SPDR S&P Retail ETF (XRT). He tipped his father Alfred C. Mindlin, a certified public accountant. Father and son then illegally traded in four different securities underlying the XRT with knowledge of massive, market-moving trades in these securities that Goldman would later execute.

The case marks the SEC’s first insider trading enforcement action involving ETFs.  According to the SEC's order instituting proceedings against the Mindlins, the insider trading occurred in December 2007 and March 2008.

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