Archive

January 31, 2019

Saleem Khan, of Dublin, pleaded guilty to conspiracy and securities fraud charges arising from an insider trading scheme in which he obtained and traded on material, non-public information. Khan admitted he obtained material, non-public information relating to the sales and financial performance of Ross Stores, Inc., a discount-clothing retailer then headquartered in Pleasanton, Calif., from a friend who worked in Ross’s finance department. Based on this material, non-public information, Khan entered into options contracts regarding Ross securities in advance of Ross’s monthly sales announcements. He admitted he provided pecuniary benefits to the Ross “tipper” and made profits in excess of $3,500,000 as a result of the scheme. DOJ

October 18, 2018

Michael Siva, a broker and financial advisor at a New York City investment bank, pleaded guilty to securities violations in connection with his role in an insider trading scheme in which Siva and co-defendants traded on material non-public information regarding potential and unannounced merger and acquisition transactions, including tender offers, which they obtained from a co-conspirator employed as a technology consultant at a different investment bank.  Siva and a co-defendant generated illicit profits in excess of $3 million on the trades, and Siva also earned thousands of dollars in commissions on the illegal trades entered on behalf of his clients. SDNY.  See also, August 2017 SEC Action.

October 16, 2018

Sudhakar Reddy Bonthu, a former manager at Equifax, was sentenced to 8 months of home confinement and fined $50,000 for insider trading related to Equifax's massive data breach in 2017. As a member of a team tasked with quickly developing an online user interface for 100 million possible victims of a data breach at an unnamed company, Bonthu quickly guessed that the company in question was the one he worked for. In violation of company policy as well as federal law, Bonthu then allegedly bought a large quantity of Equifax stock, specifically put options, which allowed him to profit if the value plummeted within a two week period. Six days later, Equifax announced the breach and its stock value plummeted, netting Bonthu more than $75,000 in fraudulently gained profits. USAO NDGA

July 24, 2018

The SEC announced Yao Li, Vice President of Technology at Alliance Fiber Optic Products, has agreed to pay disgorgement of $196,203, prejudgment interest of $23,062, and a $196,203 penalty (for a total of $415,468) to settle charges that he made nearly $200,000 in illicit profits by trading on inside information in advance of three disappointing earnings announcements by the company. SEC

July 17, 2018

Rodolfo Sablon has pled guilty to insider trading charges in connection with a tender offer for his role in an insider trading scheme based on material, nonpublic information that Sablon received from a former employee at the bank. Sablon collected more than $2M in illicit investments based off of his scheme. USAO Southern District of New York

July 10, 2018

Colorado man Frank Morelli was sentenced to seven years in prison for his role in a seven-person scheme to defraud the SEC and investors.  With his co-conspirators, Morelli had manipulated the stock price of a company they controlled through false press releases, organized insider trading, and bribery.  The fraud had generated several million dollars in profits before it was stopped.  USAO EDPA

July 6, 2018

A former hedge fund manager and a former stock trader were convicted of, among other charges, conspiracy to commit securities fraud in connection with a scheme that generated $30 million in ill-gotten profits.  The defendants conspired with cybercriminals to obtain press releases prior to their release and then execute trades designed to profit off their advance knowledge of the financial information contained in the announcements.  DOJ, DHS, the Secret Service, and the SEC worked together on the investigation and prosecution.  USAO EDNY

June 28, 2018

The SEC charged a former Equifax manager with insider trading in advance of the company’s September 2017 announcement of a massive data breach that exposed Social Security numbers and other personal information of approximately 148 million U.S. customers. This is the second case the SEC has filed arising from the Equifax data breach.  In March, the former chief information officer of Equifax’s U.S. business unit was charged with insider trading. SEC

June 13, 2018

The founder and former CEO of Alliance Fiber Optic Products, Inc., Peter Chang, was sentenced to two years in prison following his guilty plea on charges of insider trading.  Chang used brokerage accounts in his brother’s and his wife’s name to purchase and sell company stock at times when he was in possession of material nonpublic information about the company.  ND Cal

May 31, 2018

The SEC charged an employee of a prominent investment bank with repeatedly using his access to highly confidential information in order to place illicit and profitable trades in advance of deals on which the bank was providing investment banking advisory services. According to the SEC’s complaint, Woojae “Steve” Jung, a Vice President of Investment Banking who worked in the bank’s San Francisco and New York offices, used sensitive client information in order to trade in the securities of 12 different companies prior to the announcement of market-moving events. The SEC alleges that between 2015 and 2017, Jung used an account held in the name of a friend living in South Korea to place these illegal trades and generate profits of approximately $140,000. As alleged in the complaint, by using his friend’s brokerage account, Jung attempted to evade detection by skirting his employer’s requirements that he pre-clear his trades and that he use an approved brokerage firm that would have reported the trading to his employer. SEC