Saddened. Outraged. Shocked. Personally infuriated.
Those are some of the words that Blackstone founder Steve Schwarzman used to describe his reaction to alleged insider trading by a Blackstone managing director. DealJournal obtained the memo Schwarzman sent out employees today reaction to the SEC’s charges that Ramesh Chakrapani tipped a financial analyst friend about about a big deal involving supermarket chain Albertson’s.
“Abuse of inside information goes against everything our firm stands for,” Schwarzman writes. “I am personally infuriated that one person’s behaviour could damage our unblemished record built up over nearly a quarter century.”
Message from Steve Schwarzman
Issued: January 13, 2009
I am both saddened and outraged to have to tell you that the SEC has brought a civil complaint today against Ramesh Chakrapani in our Corporate Advisory Services Group, charging him with passing on inside information three years ago about a pending transaction on which he worked as a 30 year old vice president.
We are all shocked by this alleged breach of the law and violation of our firm’s compliance policies and ethical standards. This employee has been suspended and we have told the authorities that they will have our firm’s full cooperation in their investigation into this matter.
This is the first time in the firm’s 24-year history that any employee of the firm has been accused of any infringement of securities laws. Abuse of inside information goes against everything our firm stands for. I have personally made it an absolute priority to speak to each new class of analysts and associates about the prime importance of protecting confidential information and guarding against insider trading. Our employees’ absolute integrity at all times and careful protection of any confidential information that comes into their possession have been the foundation of the reputation we have earned for professionalism and ethical conduct in everything we do, and these allegations undermine the many years of good work by all of the rest of us. I am personally infuriated that one person’s behaviour could damage our unblemished record built up over nearly a quarter century.
Should you receive any calls about this matter, please refer them all to [redacted]. Because this case is the subject of a pending investigation, we would also ask you to refrain from discussing it with anyone.