John Youngdahl, a former Goldman Sachs economist, on Wednesday pleaded guilty to insider trading in US Treasury bonds, the US attorney’s office said. He also pleaded guilty to theft of government property, wire fraud and conspiracy charges.

The charges relate to his having received advance notice of the US Treasury Department’s decision to stop selling 30-year bonds. The plan, which was announced on October 31 2001, caused one of the biggest one-day bond rallies ever.

Youngdahl, 44, faces between 33 and 41 months in prison. Sentencing is scheduled to take place on January 30. He received the insider information from Peter Davis, a political consultant who had agreed to leak information from press conferences held by the US Treasury Department before the information was released to the public, the US attorney’s office said.

Davis told Youngdahl about the 30-year plan and Mr Youngdahl then passed it on to traders at Goldman. In September Mr Davis pleaded guilty to insider trading and other charges, and awaits sentence.

When Youngdahl entered his guilty plea, he told the judge he believed that sharing the information with the traders might secure him a better bonus.

He also admitted that he had lied to federal agents in an attempt to obstruct the criminal investigation, and had given perjured testimony to the US Securities and Exchange Commission.

Youngdahl has settled civil charges over the incident with the SEC, agreeing to pay $240,000. Goldman, which was found liable for Youngdahl’s actions, settled with the SEC in September, agreeing to pay $9.3m.

A Goldman spokesman said: “Personal integrity is the bedrock of trust. The firm will not tolerate inappropriate behaviour by any of its people.”

Scroll to Top