New York: Several Indian-origin persons have been charged with insider trading Monday in three separate alleged schemes in which they made more than five million dollars in illegal profits. Amit Bhardwaj, 49, the former chief information security officer of Lumentum Holdings and his friends Dhirenkumar Patel, 50, Srinivasa Kakkera, 47, Abbas Saeedi, 47, and Ramesh Chitor, 45, have been charged by the Securities and Exchange Commission (SEC). The SEC alleges that these persons, all residing in California, traded ahead of two corporate acquisition announcements by Lumentum and generated more than USD 5.2 million in illicit profits.
In another action, the SEC alleges insider trading by investment banker Brijesh Goel, 37 and his friend Akshay Niranjan, 33, both of New York, who was a foreign exchange trader at a large financial institution.
The SEC alleges that the two men, close friends from business school, made more than USD 2,75,000 from illegally trading ahead of four acquisition announcements in 2017 that Goel learned about through his employment. The complaint further alleges Niranjan purchased call options on the target companies and later wired Goel USD 85,000 for the latter’s share of the proceeds.
The SEC’s enforcement actions were filed in federal district court in Manhattan, and in each case the US Attorney’s Office for the Southern District of New York announced Monday parallel criminal charges.
“If everyday investors think that the market is rigged at their expense in favour of insiders who abuse their positions, they are not going to invest their hard earned money in the markets,” said Gurbir S Grewal, Director of the SEC’s Enforcement Division. “But as today’s actions show, we stand ready to leverage all of our expertise and tools to root out misconduct and to hold bad actors accountable no matter the industry or profession. That’s what’s required to restore investor trust and confidence, Grewal added.
The SEC’s complaints charge all nine defendants with violating the anti-fraud provisions of the securities laws and seek permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. In all three cases, the SEC’s investigation is ongoing.
In the case involving Bhardwaj, the SEC’s complaint alleges that, through his work at Lumentum, he learned material non-public information about the company’s plans to first acquire ‘Coherent’ and later acquire ‘NeoPhotonics Corporation’.
Based on this information, Bhardwaj allegedly purchased ‘Coherent’ securities ahead of the January 2021 announcement of Lumentum’s agreement to acquire the company and tipped his friend Patel, with the understanding that he also would later share some of his ill-gotten gains.