News

Compliance chief busted for stealing confidential SEC information

05/11/2019

Ex SEC examiner pleads not guilty for stealing confidential SEC information

A former examiner for the Securities and Exchange Commission [SEC] allegedly took “COMPROMISING” information about an SEC investigation into a private equity firm that hired him to be its managing director and chief compliance officer.

Michael S. Cohn was charged last week in federal court in Islip, New York with

  • obstruction of justice, unauthorized computer access, and unauthorized disclosure of confidential information.

Cohn pleaded not guilty to the superseding indictment (pdf) and was released on a $250,000 bond.

Cohn faces up to 20 years in prison if convicted on the obstruction of justice count, up to five years on the unauthorized computer access count, and up to a year in prison on the unauthorized disclosure count

Background

  1. At the SEC enforcement division Cohn title was Securities Compliance Examiner and Industry Specialist.
  2. He helped investigate securities law violations.
  3. He left the SEC in October 2018 and went to work for New York-based GPB Capital Holdings, LLC [GBP] - The firm manages about $1.5 billion in assets.

The charge

  1. During talks with GPB about working there, Cohn allegedly said he had inside information about the SEC’s investigation.
  2. the DOJ said.
    1. He disclosed the information to members of GPB’s senior management “on several occasions,”
  1. The confidential SEC information about GPB that Cohn allegedly took revealed
    1. “privileged attorney-client work product and contacts with law enforcement and other regulatory agencies.”

The FBI SAY

  1. The FBI’s William Sweeney said,
    1. “When Cohn left the SEC to join GPB, he left with more than his own career ambitions.”
    2. “The proprietary information he allegedly retrieved — from databases he wasn’t authorized to access — included compromising information about a GPB investigation and sensitive details related to the same,

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