SEC Charges 7 Californians of Insider Trading
India-West Staff Reporter
SAN FRANCISCO, CA – Seven Indian Americans have been charged by federal authorities with insider trading which enriched them illegally by over a million dollars.
Those charged by the Securities and Exchange Commission include Hari Prasad Sure, 34, Lokesh Lagudu, 31 and Chotu Prabhu Tej Pulagam, 29.
The SEC said the trio were friends and worked as software engineers at Twilio, a cloud computing communications company, here.
According to the complaint, Sure tipped his friend Dileep Kumar Reddy Kamujula, 35, who successfully traded in Twilio’s options. Lagudu similarly tipped his girlfriend Sai Nekkalapudi, 30 with whom he lived, and former roommate Abhishek Dharmapurikar, 33. Pulagam tipped his brother Chetan Prabhu Pulagam, 31.
The SEC announced insider trading charges against the seven individuals – all California residents – for allegedly generating more than $1 million in collective profits by insider trading ahead of Twilio’s positive first quarter 2020 earnings announcement on May 6, 2020.
SEC said Sure, Lagudu and Chotu Pulagam had access to various databases relevant to Twilio’s reporting of revenue and they learned through the databases that the company’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.” The SEC said the group communicated often
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.