A former employee of Goldman Sachs Group Inc. and Blackstone Inc. has been charged by federal prosecutors with securities fraud for allegedly informing his friends about more than a dozen deals, Bloomberg has reported.

The Securities and Exchange Commission (SEC) and the Justice Department claim that 26-year-old Anthony Viggiano had tipped two of his friends to deals that he heard about while working at the two Wall Street firms.

The charges detail how group made more than $400,000 on trades passed around on messaging apps like Signal as well as Xbox chat.

“Viggiano betrayed the trust of his employers by tipping his friends,” Damian Williams, the US Attorney for the Southern District of New York, said in a statement. “No matter how evasive insider traders’ conduct, or the lengths gone to hide their offenses, this Office will track down and prosecute those who attempt to cheat the system,” he said.

This is fifth such incident involving a Goldman Sachs employee in recent years. In a previous incident that happened in 2022, a Goldman banker was accused of passing stock tips to a squash buddy. Prior to that, three insider trading cases involving Goldman staffers over the course of an 18-month period that ended in October 2019.

Both Goldman and Blackstone said they are cooperating with prosecutors, Bloomberg stated. “The allegations in the indictment are egregious,” said Mary Athridge, a spokeswoman for Goldman Sachs. “The firm has zero tolerance for this kind of behavior.”

Speaking of Viggiano, he worked in the asset and wealth management division, according to the indictment. He had previously resigned from a post at Blackstone, after the firm discovered he had been trading without pre-clearance.

“We make crystal clear to every employee through our extensive compliance and training procedures that we have absolutely zero tolerance for the behavior alleged,” Matt Anderson, a Blackstone spokesman, said in a statement. “This individual was a junior analyst in a non-investment, finance function who was briefly employed for less than seven months and left two years ago.”

His childhood friend, Christopher Salamone, pleaded guilty on September 21 and is cooperating with prosecutors, the Justice Department said. Lawyers for Viggiano and Salamone declined to comment.

The SEC has alleged that Viggiano sent tips about deals in 2021 through May 2023 involving companies including, American International Group Inc., Harmony Biosciences Holdings Inc., and CDK Global Inc., to his friends Stephen Forlano and Salamone. Those two allegedly traded on the tips, making hundreds of thousands of dollars in profits. A lawyer for Forlano said his client denies the allegations.

Viggiano tried to cover his tracks by passing tips to Salamone, asking him to download the encrypted messaging app Signal to communicate and then used the disappearing message feature. He also supplied Salamone with cash for trading, the SEC said as reported by Bloomberg.

As per SEC, Viggiano and Salamone are friends dating back 20 years and Salamone’s mother and Viggiano’s father are dating while Forlano went to college with Viggiano and Nathan Bleckley, a US Army captain who is a defendant in the SEC suit, but wasn’t charged by the DOJ.

From the tips given to Salamone, he made $322,000 and gave Viggiano $35,000 in cash, and planned to hand over more money, the SEC said.

The former Goldman employee had suggested that the illegal trading profits be split 50-50. The other friend Viggiano tipped — Forlano not only traded off that information, but also passed it to five friends and family members.

Salamone confronted Viggiano on a call in June, asking if there was information showing he gave tips to Forlano. Salamone was recording the conversation.

“Nah. Nah,” Viggiano replied. “Because similar to you… Signal, or like XBOX 360 chat, there’s no tracing that. Good luck ever finding that.”

(With inputs from Bloomberg)