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Former SEC investigator charged with revealing insider information

The U.S. Securities and Exchange Commission in Washington, D.C.

Adam Jeffery | CNBC

Federal prosecutors on Wednesday charged a former Securities and Exchange Commission investigator with obstruction of justice, unauthorized computer access and disclosure of confidential information to a firm where he sought employment.

The defendant, Michael S. Cohn, is currently serving as managing director and chief compliance officer at GPB Capital Holdings's alternative asset management company. The firm controls about $ 1.5 billion in assets and specializes in acquiring private companies in the automotive retail, waste management and health-care sectors, according to its website.

Cohn allegedly accessed compromising information about an investigation into the GPB when he was a compliance examiner and industry specialist at the SEC's enforcement division, according to officials with the Eastern District of New York, the FBI and the SEC Office of the Inspector General, who announced the charges .

While Cohn was in discussions with GPB about employment there, he was divulged in information several times to GPB's senior management, prosecutors claim.

GPB faces a slew of litigation relating to breach of fiduciary duty and alleged securities fraud.

Cohn left the SEC in mid-October 2018 and took a $ 400,000-per-year position at GPB four days later, according to a bail document. Cohn was arraigned and released on a $ 250,000 bond Wednesday.

"Mr. Cohn is innocent of the charges and entered a not guilty plea today in court. He looks forward to vindicating himself at trial," an attorney representing Cohn said in a statement to CNBC.

Cohn may face up to 20 years in prison for obstruction of justice, as many as five years in prison for unauthorized computer access and a maximum of one year for unauthorized computer disclosure.

The SEC declined to comment.

– CNBC's Jim Forkin contributed to this report.

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