Former US congressman charged with insider trading based on inside knowledge from consulting work
Former FBI agent intern and friend charged with insider trading based on inside information stolen from the intern’s ex-boyfriend
Network of individuals charged with insider trading based on inside information obtained from the former Chief Information Security Officer of the Telecommunications Company
New York-based investment banker charged with insider trading for using stolen information about potential investments to tip off a trading friend.
Damian Williams, United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director of the New York Office of the Federal Bureau of Investigation (“FBI”) announced indictments in four separate insider trading cases, collectively charging nine defendants for securities fraud and other related charges, including in some cases obstruction of justice. These cases involve trading based on confidential information misappropriated from entities and individuals in a variety of industries and reflect the U.S. Attorney’s Office for the Southern District of New York’s broad investigative reach and continued determination to root out corruption in our financial markets. The defendants in these cases made between hundreds of thousands and millions of dollars from illegal trading of securities based on material, non-public information stolen from numerous sources.
U.S. Attorney Damian Williams said: “The message of today’s arrests is simple: My office remains as committed as ever to rooting out insider trading in all its forms. Insider trading erodes the confidence and trust of investors in our capital markets. We will continue to investigate and prosecute those who cheat the markets by using insider information to line their own pockets.The four cases indicted today—involving a former politician, a former member of law enforcement, executives of California-based technology companies and a New York-based investment banker – demonstrates the breadth and scope of our focus on catching and prosecuting these criminals in all areas of our financial system.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: “The four cases described here illustrate that insider trading continues to plague our financial markets. The specifics of each case may vary, but they all have one thing in common – all involved let greed dictate their actions and made trades based on material non-public information. The crimes we allege threaten both the integrity of our financial markets and investors’ faith in them. Our actions demonstrate that we remain committed to ensuring equal conditions for all.”
According to the allegations contained in the indictments filed in federal court and other publicly available information:[1]
STEPHEN BUYER, a former U.S. Congressman from Indiana, engaged in two separate but related insider trading schemes to steal material non-public information he obtained through consulting work and place timely, profitable securities trades based on the stolen information. Only in or around March and April 2018 did BUYER purchase shares of Sprint Corporation (“Sprint”) prior to the public announcement on April 29, 2018 that T-Mobile US, Inc. (“T-Mobile”) and Sprint would merge, in a deal worth 26.5 billion. Prior to T-Mobile’s public announcement of the transaction, executives at T-Mobile told a small, trusted group of consultants that they had continued to work on the deal, including the BUYER, about the merger and asked them to keep the information confidential. BUYER breached his duty of confidentiality to T-Mobile and misappropriated this information by purchasing Sprint stock across multiple brokerage accounts, including his own accounts, an account shared with his cousin, and an account in the name of a close personal friend ( “ Individual-1″). Across these accounts, the BUYER earned more than $126,000 from the purchase and subsequent sale of Sprint stock after the merger was publicly announced.
In or around June through August 2019, the BUYER traded shares in Navigant Consulting, Inc. (“Navigant”) prior to Navigant’s acquisition of the consulting and advisory firm Guidehouse. As with Sprint, BUYER determined through its consulting work for Guidehouse that Guidehouse intended to acquire Navigant and misappropriated that information by purchasing Navigant stock prior to the public announcement of the acquisition. BUYER purchased Navigant split across multiple brokerage accounts, including accounts in his own name, joint accounts with family members, and Individual-1’s account. In total, Buyer earned more than $223,000 from his illegal Navigant trades.
BUYER, 63, of Noblesville, Indiana, has been charged with four counts of securities fraud, each of which carries a maximum term of 20 years. .
United States v. Markin and Wong
In early 2021, SETH MARKIN and BRANDON WONG together made more than $1.4 million in illegal profits by trading stocks based on inside information that MARKIN misappropriated from his then-boyfriend, who was then an attorney at a large law firm in Washington D.C. to work on the acquisition of Pandion Therapeutics (“Pandion”) by Merck & co. (“Merck”). To carry out the illegal insider trading scheme, MARKIN secretly reviewed his girlfriend’s confidential work documents without her permission and discovered that within weeks Merck, a publicly traded pharmaceutical company, would purchase Pandion, a publicly traded biotechnology company. company, at approximately three times the value of Pandion’s share price at the time. After acquiring this material non-public information from his girlfriend, MARKIN bought stock in Pandion and tipped off several friends and family members, including WONG. WONG, in turn, bought hundreds of thousands of dollars of Pandion stock and directed at least eight other people to buy Pandion stock. In total, MARKIN and WONG directly or indirectly induced more than twenty individuals to trade Pandion stock based on the material non-public information that MARKIN misappropriated from his girlfriend, resulting in millions of dollars in ill-gotten gains.
At the time of the relevant transactions, MARKIN had been admitted to the Federal Bureau of Investigation as a new agent trainee. In addition to committing the insider trading scheme, MARKIN lied to hide his illegal Pandion trades. In or about June 2021, after MARKIN and his girlfriend ended their relationship, and as MARKIN prepared to begin training as a new agent at the FBI Academy in Quantico, Virginia, MARKIN’s ex-girlfriend called him to ask why MARKIN’s name had appeared. in an inquiry by the Financial Industry Regulatory Authority (“FINRA”) regarding trading in Pandion shares. In response, MARKIN lied to her and falsely claimed that he did not deal in Pandion shares. In addition, in or about November 2021, MARKIN lied to FBI agents when interviewed about his Pandion trade, conduct that forms the basis of a separate indictment against MARKIN for making false statements.
MARKIN, 31, of Washington Crossing, Pennsylvania, has been charged with nine counts of securities fraud and eight counts of offer fraud, each of which carries a maximum penalty of 20 years in prison and one count of conspiracy and one count of making false statements , who each carry a maximum sentence of 5 years in prison, and were arrested this morning.
WONG, 38, of New York, has been charged with eleven counts of securities fraud and ten counts of offer fraud, each of which carries a maximum sentence of 20 years in prison, and one count of conspiracy, which carries a maximum term of 5 years in prison and was arrested this morning. The case has been assigned to U.S. District Judge Edgardo Ramos.
United States v. Bhardwaj, Kakkera and Saeedi
From November 2020 to April 2020, AMIT BHARDWAJ, SRINIVASA KAKKERA, ABBAS SAEEDI engaged in an insider trading scheme in which BHARDWAJ, who was the Chief Information Security Officer (“CISO”) of Lumentum Holdings Inc. (“Lumentum”), misappropriated material, non-public information belonging to Lumentum and then himself traded on that information and tipped off his criminal associates, including KAKKERA, SAEEDI, Dhirenkumar Patel and Ramesh Chitor, in connection with two separate potential acquisitions by Lumentum, Coherent, Inc. (“Coherent”) and Neophotonics Coproration (“Neophotonics”).
In approximately December 2020, BHARDWAJ learned that Lumentum was considering acquiring Coherent. Based on this material, non-public information, BHARDWAJ himself purchased Coherent shares and call options, and BHARDWAJ tipped off two friends – including Dhirenkumar Patel – and a close family relative, and these individuals all traded in Coherent securities as a result. BHARDWAJ and Patel agreed that Patel would pay BHARDWAJ fifty percent of the profits that Patel earned from trading with Coherent based on the MNPI provided by BHARDWAJ. As Coherent’s stock price rose substantially following the January 19 announcement, AMIT BHARDWAJ, his close family member, his friend Patel and another friend closed their positions in Coherent securities, making a combined profit of nearly $900,000.
In or about October 2021, BHARDWAJ learned that Lumentum was engaged in confidential discussions with Neophotonics regarding a potential acquisition. BHARDWAJ supplied this MNPI to SRINIVASA KAKKERA, ABBAS SAEEDI and Ramesh Chitor and these individuals all traded Neophotonics securities as a result. In connection with Chitor’s trade, BHARDWAJ and Chitor agreed that Chitor and Bhardwaj would share the profits equally. As Neophotonics’ stock price rose significantly following the announcement of the acquisition in November 2021, KAKKERA, SAEEDI and Chitor closed their positions in Neophotonics’ securities, earning a combined total of approximately $4.3 million in realized and unrealized profits.
After they were voluntarily interviewed by the Federal Bureau of Investigation and received federal grand jury subpoenas on March 29, 2022, BHARDWAJ, KAKKERA, and SAEEDI took steps to obstruct the federal investigation into their conduct. On the day of the March 29, 2022 FBI interviews, BHARDWAJ drove to the homes of certain of his co-conspirators to encourage them not to tell federal authorities the truth about their insider trading scheme. BHARDWAJ, KAKKERA, SAEEDI and Dhirenkumar Patel then met in person on several occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme, as well as the creation of false documents to support lies about payments that were in fact related to the insider trading scheme. BHARDWAJ also requested Patel’s assistance in seeking to ensure that any potentially incriminating information from BHARDWAJ’s laptop would be deleted.
BHARDWAJ, 49, of San Ramon, California, who was arrested this morning, has been charged with seven counts of securities fraud and two counts of wire fraud, each of which carries a maximum sentence 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 sentence of 5 years in prison.
KAKKERA, 47, of Pleasanton, California, who was arrested this morning, has been charged with one count of securities fraud and one count of wire fraud, each carrying a maximum penalty 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 sentence of 5 years in prison.
SAEEDI, 47, of Fremont, California, who was arrested this morning, has been charged with one count of securities fraud and one count of wire fraud, each of which carries a maximum penalty of 20 years in prison, and one count of conspiracy to commit wire fraud securities and wire fraud, and one count of conspiracy to obstruct justice, each of which carries a maximum sentence of 5 years in prison.
The case has been assigned to U.S. District Judge Gregory H. Woods.
Also today were the charges against Dhirenkumar Patel and Ramesh Chitor, who have each pleaded guilty and are cooperating with the government in this case.
BRIJESH GOEL was an investment banker in the financing group of a major international investment bank in New York, New York (the “Investment Bank”). In that position, GOEL received confidential, internal emails addressed to the Investment Bank’s Firmwide Capital Committee, which contained detailed information and analysis about potential mergers and acquisition transactions that the Investment Bank was considering financing. In violation of the duties owed to the Investment Bank, GOEL appropriated this confidential information and tipped off a friend who worked at another investment bank in New York, New York (“CC-1”) with the names of potential target companies. from these FWCC emails, typically during in-person meetings (such as when the two met to play squash). CC-1 then used this MNPI to trade call options, including out-of-the-money short options, on brokerage accounts held in CC-1’s brother’s name. GOEL and CC-1 agreed to share the profits from their trade. Between approximately 2017 and 2018, GOEL tipped CC-1 on at least seven trades in which the investment bank was involved, yielding a total illegal profit of approximately $280,000.
Between approximately May and June 2022, GOEL also blocked investigations by a grand jury in the Southern District of New York and the US Securities and Exchange Commission. Specifically, GOEL deleted and asked CC-1 to delete electronic communications regarding this insider trading scheme, including during an in-person meeting that CC-1 consensually recorded.
GOEL, 37, of New York, New York, has been charged with four counts of securities fraud and one count of obstruction of justice, each carrying a maximum penalty of 20 years in prison, and one count of conspiracy to commit wire fraud securities. and purchase offer fraud, which carries a maximum of 5 years in prison. GOEL was arrested yesterday and the case has been assigned to US District Judge P. Kevin Castel.
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The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Justice Department’s Office of the Inspector General. He further thanked the Securities and Exchange Commission and the victim’s law firm and companies for their cooperation and assistance across these investigations.
These cases are handled by the office’s Securities and Commodities Fraud Task Force. United States v. Buyer is in charge of Assistant U.S. Attorneys Jordan Estes, Kiersten Fletcher and Elizabeth Hanft. United States v. Markin and Wong is in charge of Assistant US Attorneys Kiersten Fletcher, Nicolas Roos and Negar Tekeei. United States v. Bhardwaj, Kakkera and Saeedi is in charge of Assistant US Attorneys Richard Cooper and Noah Solowiejczyk. United States v. Goel is in charge of Assistant U.S. Attorney Joshua Naftalis.
[1] As the opening sentence indicates, the entire text of the indictment and the description of the indictments below constitute allegations only, and any fact described should be treated as an allegation.
