On September 21, 2011, the SEC charged Spencer Mindlin, a former Goldman, Sachs & Co. employee, and his father with insider trading with respect to confidential trading strategies and information that he learned while working on Goldman‟s ETF desk. The SEC alleged that Mr. Mindlin learned of and shared with his father information regarding Goldman‟s plans to purchase and sell large amounts of securities underlying the SPDR S&P Retail ETF (“XRT”).
During the relevant period, Goldman allowed its customers to short the XRT and as a result, according to the SEC‟s order, was the largest institutional holder of the XRT. In addition, in order to hedge its own exposure, Goldman shorted the individual securities underlying the XRT. The SEC alleged that by virtue of his position on Goldman‟s ETF desk, Mr. Mindlin was aware of Goldman‟s non-public position in the XRT and was aware of Goldman‟s intentions to trade large amounts of securities underlying the XRT in order to hedge its position in the XRT. According to the SEC, Mr. Mindlin and his father placed multiple trades on inside information and obtained at least $57,000 in illicit profits.