The latest is Janardhan Nellore, an Indian-origin techie who worked for Palo Alto Networks, and four associates who were accused of running a “multi-million dollar” insider trading ring in December 2019.
The SEC alleged that Nellore, who worked for California-based Palo Alto, used his connections within the company to obtain unpublished, price-sensitive information to trade in its stock. The SEC said that in 2017 alone, the accused made profits of more than $7 million through such trades. He allegedly used text messages to tip off Sivannarayana Barama, Ganapathi Kunadharaju, Saber Hussain and Prasad Malempati, who also traded in the shares of the cybersecurity firm. They used the code word ‘baby’, according to the SEC.
The regulator said Nellore passed on sensitive news through cryptic messages such as these: “Enter few more baby”, “Baby is on the rise” and “Exit baby”. These messages were produced in a US District Court as evidence by the SEC.
“Nellore and his friends exploited Nellore’s access to valuable earnings information and attempted to hide their misconduct using code words and carefully tailored cash withdrawals,” said Erin Schneider, director of the SEC’s San Francisco regional office.
The illegal trading ring was active for nearly three years before being discovered last year, the SEC said. Palo Alto sacked Nellore in April 2019, after which he’s said to have tried to leave the US. He was arrested by the Federal Bureau of Investigation (FBI) in May 2019 at an airport while trying to board a flight to India. Apart from SEC charges, Nellore and his friends are also facing criminal charges being pursued by the attorney of the northern district of California.
Earlier in January 2019, the SEC had hauled up another Indian tech consultant Rajeshwar Gannamaneni for insider trading. While he was working as a senior software consultant for an investment bank, he’s said to have accessed price-sensitive information for at least 40 listed companies and used his father’s account to trade based on this. Gannamaneni made profits to the tune of $600,000 based on the insider information. In this case, SEC also booked his father, an Indian citizen, and his wife. The US SEC called it a crackdown against an insider trading racket that spanned three countries. Gannamaneni eventually settled the case with the SEC by paying an $800,000 fine.
Sudhakar Reddy Bonthu, a software engineer of Indian-origin, was charged with trading on confidential information in July 2018 related to his work for Equifax, one of the biggest consumer credit reporting agencies. He had obtained this information while creating a website for consumers impacted by a data breach.
Since 2016, there have been over a dozen instances in which the SEC has gone after US-listed companies for actions of Indian subsidiaries and their employees, based on the watchdog’s filings.
Gupta had been accused of tipping off Raj Rajaratnam about Warren Buffet’s decision to invest in Goldman Sachs. He has denied any wrongdoings.
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7 Comments on this Story
Hermit Herman401 days ago
Hardly news. Indians and Chinese are the most corrupt people.
Ashish401 days ago
This report should be published like a human rights report based on caste and religion. X number of Dalits and y number of islamists committed a fraud in USA
Slug Slurry401 days ago
India is corruption capital of world.