While Employed as a Securities and Exchange Commission
Examiner, Defendant Accessed and Disclosed Confidential Information to the
Target of an Investigation in Connection with Taking a Job With that Firm
A superseding indictment was unsealed today in federal court
in Central Islip charging Michael S. Cohn, Managing Director and Chief
Compliance Officer of GPB Capital Holdings, LLC (GPB), with obstruction of
justice, unauthorized computer access and unauthorized disclosure of
confidential information. Cohn, a former
employee of the Securities and Exchange Commission (SEC), was arraigned this
morning before United States Circuit Judge Joseph F. Bianco and released on a
$250,000 bond.
Richard P. Donoghue, United States Attorney for the Eastern
District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge,
Federal Bureau of Investigation, New York Field Office (FBI), and Carl W.
Hoecker, Inspector General of the SEC Office of Inspector General, announced
the charges.
“As alleged in the superseding indictment, the defendant
abused the trust placed in him as an SEC employee, obstructing an active
investigation,” stated United States Attorney Donoghue. “No one gets a pass for breaching the
security of government computer networks and misusing sensitive and
confidential information for their own benefit.” Mr. Donoghue expressed his appreciation to
the New York City Business Integrity Commission and the New York City Police
Department for their assistance during the investigation.
“When Cohn left the SEC to join GPB, he left with more than
his own career ambitions. 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. The charges announced today demonstrate the FBI’s commitment to protect the
securities industry, in addition to guarding the confidential information that
is essential to the success of our investigations,” stated FBI Assistant
Director-in-Charge Sweeney.
“The charges announced by the U.S. Attorney’s Office reflect
the Office of Inspector General’s commitment to investigate individuals who
obstruct SEC enforcement activities,” stated SEC Inspector General Hoecker.
As set forth in the superseding indictment and other court
documents, Cohn previously worked as a Securities Compliance Examiner and
Industry Specialist in the SEC’s Enforcement Division, where he assisted
investigations into violations of securities laws. In approximately October 2018, Cohn left the
SEC to join GPB, a private equity firm based in Manhattan and Garden City, New
York, that manages over $1.5 billion in assets.
However, prior to leaving the SEC, Cohn accessed information on SEC
servers relating to an Enforcement Division investigation into GPB. Cohn was not authorized to access this highly
sensitive material, which included confidential information, privileged
attorney-client work product and contacts with law enforcement and other
regulatory agencies. During discussions
with GPB personnel about obtaining a job there, Cohn advised them that he had
inside information about the SEC’s investigation, and on several occasions he
disclosed information to members of GPB’s senior management about that
investigation.
The charges in the superseding indictment are allegations,
and the defendant is presumed innocent unless and until proven guilty. If convicted, Cohn faces a maximum sentence
of 20 years’ imprisonment on the obstruction of justice count, a maximum of
five years’ imprisonment on the unauthorized computer access count and a
maximum of one year imprisonment on the unauthorized computer disclosure count.
The government’s case is being handled by the Office’s
Business and Securities Fraud and National Security & Cybercrime Sections. Assistant United States Attorneys Artie
McConnell and Lauren Howard Elbert are in charge of the prosecution.
The Defendant:
MICHAEL S. COHN
Age: 59
Norwalk, Connecticut
E.D.N.Y. Docket No. 19-CR-97 (S-1) (JFB)
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