Amit Bhardwaj, 49, the former head of information security at 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. The SEC alleges that these individuals, all California residents, traded prior to two company acquisition announcements by Lumentum and generated more than $5.2 million in illicit profits.
In a separate 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 forex trader at a major financial institution.
The SEC alleges the pair, close friends from business school, earned more than $275,000 from illegal trading before four acquisition announcements in 2017 that Goel learned about through his employment. The complaint further alleges that Niranjan purchased call options on the target companies and then wired Goel $85,000 for Goel’s share of the proceeds.
The SEC’s enforcement actions were filed in Manhattan Federal District Court, and in each case, the U.S. Attorney’s Office for the Southern District of New York announced parallel criminal charges on Monday.
“If ordinary investors think the market is being rigged at their expense in favor of insiders abusing their positions, they will not invest their hard-earned money in the markets,” said Gurbir S Grewal, Division Director of SEC enforcement. “But as today’s actions show, we stand ready to leverage all of our expertise and tools to root out misconduct and hold bad actors accountable, regardless of industry or profession. is what is needed to restore investor confidence.”
The SEC complaints accuse the nine defendants of violating anti-fraud provisions of securities laws and seek a permanent injunction, reimbursement with prejudgment interest and civil penalties. In all three cases, the SEC investigation is ongoing.
In the case involving Bhardwaj, the SEC complaint alleges that through his work at Lumentum, Bhardwaj learned material, nonpublic information about the company’s plans to first acquire Coherent and then acquire NeoPhotonics Corporation. .
Based on this information, Bhardwaj allegedly purchased Coherent securities prior to the January 2021 announcement of Lumentum’s deal to acquire Coherent and tipped his friend Patel on the understanding that Patel would later share some of his winnings. ill-gotten.
The SEC further alleges that in October 2021, Bhardwaj shared the information about the planned acquisition of NeoPhotonics by Lumentum with his friends Kakkera, Saeedi and Chitor, who then amassed large NeoPhotonics positions based on the advice of Bhardwaj. After the November 2021 announcement of the acquisition of NeoPhotonics, Chitor indirectly transferred funds to Bhardwaj’s parent in India as per Bhardwaj’s instructions.
The SEC complaint alleges that “following NeoPhotonics’ announcement, in late 2021, Bhardwaj asked Chitor to send money to a relative of Bhardwaj who lived in India.” Chitor agreed and ordered two people he knew who had accounts in India to send relative Indian rupees an amount equivalent to tens of thousands of US dollars. Chitor had the rupees transferred to the relative to compensate Bhardwaj for the non-public material information that Bhardwaj had provided to Chitor about the NeoPhotonics announcement.
In addition to the relief outlined above, the SEC’s complaint seeks restitution of illicit profits with prejudgment interest from defendants Gauri Salwan, 45, who is Bhardwaj’s wife, the Kakkera Family Trust, which is a trust personal and testamentary governed by the State of California and Kakkera and his wife are the directors, Janya Saeedi, 54, who is the wife of Saeedi and All US Tacos Inc, whose sole directors are Saeedi and Janya Saeedi.