- They are implicated in two separate alleged schemes that together yielded more than $5 million in ill-gotten gains.
The Securities and Exchange Commission has filed insider trading charges against eight Indian Americans in connection with two separate alleged schemes that together yielded more than $6.8 million in ill-gotten gains. Those charged include Amit Bhardwaj, a former chief information security officer (CISO); and Brijesh Goel, an investment banker, “all of whom allegedly shared confidential information with their friends, who then traded on it,” according to an SEC press release. All defendants are charged with violating the antifraud provisions of the securities laws and seek permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties, the SEC added.
The SEC’s enforcement actions were filed in federal district court in Manhattan, and in each case, the U.S. Attorney’s Office for the Southern District of New York announced parallel criminal charges, July 25. “If everyday investors think that the market is rigged at their expense in favor 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.”
In one action, the SEC alleges that Amit Bhardwaj, the former CISO of Lumentum Holdings Inc., and his friends, Dhirenkumar Patel, Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor, traded ahead of two corporate acquisition announcements by Lumentum, thereby generating more than $5.2 million in illicit profits.
Through his work at Lumentum, Bhardwaj learned material nonpublic information (MNPI) about the company’s plans to first acquire Coherent, Inc. and later acquire NeoPhotonics Corporation. Based on this information, he allegedly purchased Coherent securities ahead of the January 2021 announcement, and tipped his friend, Patel, with the understanding that Patel would later share some of his ill-gotten gains, the SEC complaint alleges.
Additionally, in October 2021, Bhardwaj shared MNPI about Lumentum’s planned acquisition of NeoPhotonics with his friends Kakkera, Saeedi, and Chitor, who then amassed large positions in NeoPhotonics based on Bhardwaj’s tips. After the November 2021 announcement of the NeoPhotonics acquisition, Chitor indirectly transferred funds to Bhardwaj’s relatives in India, as instructed by him.
The SEC also seeks disgorgement of illicit profits with prejudgment interest from relief defendants Gauri Salwan, the Kakkera Family Trust, All US Tacos Inc., and Janya Saeedi.
In another action, the SEC alleges insider trading by investment banker Brijesh Goel and his friend Akshay Niranjan, 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 $275,000 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 $85,000 for Goel’s share of the proceeds.