A former securities analyst and two friends allegedly conducted an insider trader scheme that netted more than $670,000 in profits
The Securities and Exchange Commission charged former J.P. Morgan analyst Ashish Aggarwal, 27, with illegally tipping a close friend with confidential information about upcoming mergers and acquisitions of technology companies.
In a parallel action in the U.S. District Court for the Central District of California, federal prosecutors brought criminal charges against Aggarwal.
Aggarwal allegedly learned sensitive, nonpublic information from colleagues in J.P. Morgan’s San Francisco office about two deals being advised by the firm: Integrated Device Technology’s planned acquisition of PLX Technology in 2012 and salesforce.com’s acquisition of ExactTarget in 2013.
According to the SEC’s complaint, Aggarwal tipped a friend, Shahriyar Bolandian, who then traded on the basis of those tips in his own account and in accounts belonging to his father and sister.
Bolandian allegedly conducted trades in his own accounts on Aggarwal’s behalf in an arrangement that allowed Aggarwal to circumvent J.P. Morgan’s pre-clearance rules.
Bolandian tipped another friend, Kevan Sadigh, so that he could trade on the information as well. Bolandian worked at Sadigh’s e-commerce company, and the pair bought the same series of call options in PLX Technology and ExactTarget. The pair’s trades were often within hours or minutes of each other and typically were 100 percent of the daily trading volume of the option sales.
Together, Bolandian and Sadigh allegedly made more than $672,000 in combined profits from their insider trading.
According to the criminal complaint, the three men used the gains to cover previous trading losses and to repay debts incurred by Aggarwal and Bolandian.
The SEC is seeking disgorgement, interest and unspecified civil penalties from all three men.