Three Indian Americans From California and One From New York Arrested in Insider Trading Scam

Three Indian Americans have been arrested on insider trading charges. Amit Bhardwaj, Srinivas Kakkera, and Abbas Saeedi are accused of making millions from trading stocks on insider information and trying to cover it up. They are among nine defendants charged in four separate insider trading cases, with securities fraud and other related charges, including in some cases, obstruction of justice, according to a Department of Justice press release.

From November 2020 through April 2020, Bhardwaj, who was the Chief Information Security Officer (CISO) of Lumentum Holdings Inc., misappropriated material, and non-public information belonging to the company, the DoJ said. He then traded on that information himself “and tipped his criminal associates, including Kakkera, Saeedi, Dhirenkumar Patel, and Ramesh Chitor, in connection with two separate potential acquisitions,” the DoJ added. 

According to the press release, around December 2020, Bhardwaj, 49, of San Ramon, California, learned that Lumentum was considering acquiring Coherent. Based on this material, non-public information, he himself purchased Coherent stock and call options, and tipped two friends – including Patel, who then traded in Coherent securities as a result.  

Bhardwaj and Patel agreed that Patel would pay Bhardwaj 50 percent of the profits that he earned by trading in Coherent based on the information provided by him. “When Coherent’s stock price increased substantially they closed their positions in Coherent securities and collectively profited by nearly $900,000,” the DoJ said.

Similarly, in October 2021, when Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics about a potential acquisition, he provided information to Kakkera, Saeedi and Chitor, who then traded in Neophotonics securities as a result. In connection with Chitor’s trading, he and Bhardwaj agreed that they would split the profits equally. The four collectively made approximately $4.3 million in realized and unrealized profits, according to information provided by the DoJ.

After they were interviewed by the Federal Bureau of Investigation voluntarily and served with federal grand jury subpoenas on approximately March 29, Bhardwaj, Kakkera and Saeedi took steps to obstruct the federal investigation of their conduct. Bhardwaj 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.  

Bhardwaj has been charged with seven counts of securities fraud and two counts of wire fraud, each of which carries a maximum term of 20 years in prison, and one count of conspiracy to commit securities fraud and wire fraud, and one count of conspiracy to obstruct justice, each of which carries a maximum term of 5 years in prison. 

Kakkera, 47, of Pleasanton, California, has been charged with one count of securities fraud and one count of wire fraud, while Saeedi,, 47, of Fremont, California, has been charged with one count of securities fraud and one count of wire fraud.

Patel and Chitor have separately pleaded guilty and are cooperating with the government in this case.

In a separate case, Brijesh Goel, a former investment banker in the financing group at a major international investment bank in New York, has been charged with four counts of securities fraud and one count of obstruction of justice. During his tenure at the bank, Goel misappropriated confidential information about potential mergers and acquisitions transactions to a friend, who worked at another investment bank in New York, the DoJ said. 

Goel’s friend then used that information “to trade call options, including short-dated, out-of-the-money call options, in brokerage accounts,” the DoJ said. “Between approximately 2017 and 2018, Goel tipped his friend on at least seven deals in which the investment bank was involved, yielding total illegal profits of approximately $280,000. “

Earlier this year, Goel obstructed investigations by a grand jury in the Southern District of New York and the U.S. Securities and Exchange Commission. “Specifically, he deleted and asked his friend to delete electronic communications regarding this insider trading scheme, including during an in-person meeting that the friend consensually recorded,” the DoJ said.