7 Indian-origin techies booked insider trading worth $1 million in US
Categories: FOREIGN COUNTRIES
Seven Indian-origin persons have been charged by US federal authorities with insider trading in a scheme through which they made over a million dollars in illegal profits.Hari Prasad Sure, 34, Lokesh Lagudu, 31 and Chotu Prabhu Tej Pulagam, 29, are friends and worked as software engineers at Twilio, a San Francisco-based cloud computing communications company, the Securities and Exchange Commission said Monday.The complaint said Mr Sure tipped his close friend Dileep Kumar Reddy Kamujula, 35, who successfully traded in Twilio's options. Mr Lagudu similarly tipped his girlfriend Sai Nekkalapudi, 30 with whom he lived, and he also tipped his former roommate and close friend Abhishek Dharmapurikar, 33. Mr Pulagam tipped his brother Chetan Prabhu Pulagam, 31. All the seven defendants live in California. According to the SEC's complaint, Mr Sure, Mr Lagudu and Mr Chotu Pulagam had access to various databases relevant to Twilio's reporting of revenue.The SEC's complaint alleges that despite receiving a company policy that prohibited them from insider trading, Mr Sure, Mr Lagudu and Mr Chotu Pulagam knowingly tipped off, or used the brokerage accounts of Mr Kamujula, Ms Nekkalapudi, Mr Dharmapurikar and Chetan Pulagam to trade Twilio options and stock in advance of its May 6, 2020 earnings announcement while in possession of the confidential information concerning customer usage. "On several occasions between late March and early May 2020, before Twilio's public earnings announcement, Mr Sure, Mr Lagudu and Mr Chotu Pulagam used internal chat channels to discuss in Telugu whether Twilio might exceed market expectations in its quarterly report of earnings, due in May 2020."The complaint said that "armed with valuable inside information", they had obtained from Twilio, Mr Sure, Mr Lagudu and Mr Chotu Pulagam began passing tips to their family and friends through phone calls and in-person visits in advance of Twilio's earnings announcement on May 6, 2020. "Sure noted "[l]ooks like [the stock price] is going to be $150," to which Chotu Pulagam responded "Millionaireeee," the complaint said.The SEC's complaint, filed in the Northern District of California, charges each of the defendants with violating anti-fraud provisions of the Securities Exchange Act. The US Attorney's Office for the Northern District of California also announced criminal charges against Kamujula.