Indian American Amit Bhardwaj of San Ramon, Calif., Sentenced to 24 Months Prison Term for Insider Trading
- The former Lumentum Executive misappropriated information about impending corporate transactions to trade on that information and tip his associates.
An Indian American man from California was sentenced to 24 months in prison and ordered to pay a fine of nearly $1 million for his participation in a scheme to commit insider trading, the Department of Justice announced last week. Amit Bhardwaj, a former Chief Information Security Officer at Lumentum Holdings Inc., misappropriated information about impending corporate transactions to trade on that information and tip his associates.
According to Damian Williams, the United States Attorney for the Southern District of New York, Bhardwaj, 49, of San Ramon, “violated the trust placed in him by his employer by tipping his associates with valuable, non-public information regarding Lumentum’s planned corporate acquisitions.”
According to the allegations in the indictment and statements made in public court proceedings, Bhardwaj learned in December 2020 that his company was “considering acquiring” Coherent, Inc. Based on this information, he purchased Coherent stock and call options, then tipped three associates. The trio, which included his friend Dhirenkumar Patel, another friend, and one of Bhardwaj’s close family relatives, “traded in Coherent securities, and agreed that that Patel would pay Bhardwaj 50% of the profits that he earned by the trading. “When Coherent’s stock price increased substantially following the announcement of the Lumentum acquisition,” the trio “closed their positions in Coherent securities and collectively profited by nearly $900,000,” the DOJ said.
A few months later, in October 2021, when Bhardwaj came to know about Lumentum’s potential acquisition of Neophotonics Corporation, he provided this information to Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor. They subsequently traded in Neophotonics securities. In connection to that trading, Chitor and Bhardwaj agreed thatvthe two of them would split the profits equally. When Neophotonics’s stock price increased substantially following the announcement they closed their positions in Neophotonics securities and “collectively made approximately $4.3 million in realized and unrealized profits.”
After they were interviewed by the Federal Bureau of Investigation voluntarily and served with federal grand jury subpoenas in March 2022, Bhardwaj took steps to obstruct the federal investigation of their conduct. He drove to the homes of certain of his co-conspirators to encourage them not to tell the federal authorities the truth about their insider trading scheme. He and his associates subsequently met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme. They also created false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.