Software engineers allegedly used valuable pandemic related revenue information at San Francisco tech company
The Securities and Exchange Commission has charged three Indian American software engineers along with four family members and friends in an insider trading scheme to allegedly make more than $1 million in illegal profits.
Employed at Twilio, Inc, a San Francisco-based cloud computing communications company, three friends Hari Sure, Lokesh Lagudu and Chotu Pulagam had access to various databases relevant to the company’s reporting of revenue, according to the SEC complaint.
Read: Indian American charged with $5 million Covid-relief loan fraud (March 1, 2022)
SEC alleged Monday that around March 2020, they learned through the databases that Twilio’s customers had increased their usage of the company’s products and services in response to health measures taken in light of the Covid-19 pandemic, and concluded in a joint chat that Twilio’s stock price would “rise for sure.”
Despite receiving a company policy that prohibited them from insider trading, Sure, Lagudu and Chotu Pulagam knowingly tipped off four of their family and close friends – Dileep Kamujula, Sai Nekkalapudi, Abhishek Dharmapurikar and Chetan Pulagam.
Their brokerage accounts were used 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. According to the complaint, the scheme generated more than $1 million in illegal trading profits.
“We allege that this insider trading ring took advantage of valuable revenue information related to the pandemic at a San Francisco tech company,” said Monique C. Winkler, Acting Regional Director of the SEC’s San Francisco Regional Office. “We are holding these alleged tippers and tippees accountable for their roles in the scheme.”
Read: SEC Charges 7 Indian-Origin Techies for Insider Trading Worth $1 Million (March 29, 2022)
The SEC’s complaint, filed in the Northern District of California, charges each of the defendants with violating the antifraud provisions of the Securities Exchange Act of 1934.
The US Attorney’s Office for the Northern District of California announced criminal charges against Dileep Kamujula on Monday.
The SEC’s investigation, which is continuing, was conducted with the assistance of the US Attorney’s Office for the Northern District of California, the FBI, and the Financial Industry Regulatory Authority (FINRA), SEC said.