Two federal agencies have charged a former McKinsey & Co. partner with using inside information to profit on the acquisition of a fintech company by one of the firm’s clients: Goldman Sachs Group.

Puneet Dikshit, of New York City, learned of “highly confidential information” regarding an intended purchase by Goldman Sachs of GreenSky, a consumer loan fintech platform, as part of his duties, according to a press release Wednesday from the Securities and Exchange Commission. The SEC did not identify the consulting firm, but McKinsey confirmed in an email Dikshit had been a partner prior to being fired.

Dikshit is charged by the SEC with violating securities law that forbids trading on inside information. He was arrested Wednesday and also charged with two counts of securities fraud by the U.S. Attorney’s Office for the Southern District of New York.

The Justice Department charges each carry a maximum sentence of 20 years in prison.

Starting in 2019, Dikshit allegedly led a McKinsey team that advised Goldman Sachs on its intention to purchase GreenSky. As the deal was being finalized in August 2021, Dikshit began buying out-of-the-money GreenSky call options that were set to expire just days after the public announcement of the deal, the SEC stated in its complaint.

Dikshit did not clear these transactions with his employer, and the SEC said they were in violation of the firm’s policies and procedures. He also signed numerous nondisclosure agreements that should have prevented him from using or disclosing that nonpublic information, the SEC said.

After locking in lower prices for GreenSky stock with the options, Dikshit sold the options on the day of the merger announcement and earned more than $450,000 in illicit profits, the SEC said.

“We allege that Dikshit breached duties to his employer and his client by misusing their confidential information for his own financial gain,” said Joseph Sansone, chief of the SEC Enforcement Division’s Market Abuse Unit, in a statement. “Thanks to our trading analysis tools, we were able to move swiftly to hold him accountable for his actions and protect the fairness of our securities markets.”

A spokesman for McKinsey responded to inquiries about Dikshit’s arrest with a statement: “We have terminated the employment of a partner for a gross violation of our policies and code of conduct. We have zero tolerance for the appalling behavior described in the complaint, and we will continue cooperating with the authorities.”