Insider Trading: Ex-Amazon Financial Analyst Allegedly Tipped Former Fraternity Brother, Man Accused of Giving Merger Info to Brother, Ex-Pricewaterhouse Coopers Auditor is Subject of Securities Case, and Deutsche Börse to Pay $12.5M in Fines

Ex-Amazon Employee and Former College Schoolmate Accused of Insider Trading
The US Securities and Exchange Commission has brought civil insider trading charges against Brett Kennedy and Maziar Rezakhani. Kennedy, an ex- Amazon financial analyst, is accused of leaking confidential information to Rezakhani, who was a former fraternity brother, prior to a company earnings announcement for Amazon being disclosed to the public. Kennedy is also facing criminal charges.

According to the regulator, Kennedy shared the 2015 first quarter earnings information without authorization while employed at Amazon. Rezakhani then allegedly illegally traded on the information in advance of the information’s release to the public and he made over $116K in illicit profits.

Also, on two online communications platforms involving trading, Rezakhani accurately predicted Amazon’s first quarter performance. He is accused of paying Kennedy $10K for the tip and sharing the money with Sam Sadeghi, who gave him trading advice. Sadeghi also faces civil charges.

Sadeghi and Kennedy are settling the SEC charges without denying or admitting to them. Kennedy will pay $10K of disgorgement and interest. Sadeghi will pay almost $11,600 in disgorgement plus interest and a more than $24K penalty.

Man Accused of Tipping Brother in Intel Corp. and Mobileye Merger is Added to SEC Case
James Shaoul, a cosmetic surgeon who lives in Israel, is now a defendant in an insider trading case brought by the SEC earlier this year against his brother Roger Shaoul and trader Lawrence F. Cluff Jr. James is accused of tipping his brother with information about the upcoming merger between Intel Corporation and Mobileye NV, instructing him how to buy certain mobile options. Roger then allegedly shared the nonpublic information with Cluff.

According to the SECs amended complaint, James enjoyed personal and professional ties with the founders of Mobileye, who were involved in the merger talks. He also provided nonsurgical cosmetic services to a Mobile eye director and his spouse.

Ex-PricewaterhouseCoopers Auditor and Cousin-in-Law Settle Insider Trading Charges
Mayank Gupta, a former PricewaterhouseCoopers Auditor, and his cousin-in-law Pushpendra Agrawal have agreed to resolve SEC charges accusing them of insider trading. According to the regulator’s complaint, upon discovering that the company Cavium was getting ready to acquire QLogic Corp., Gupta notified Agrawal, who then purchased 250 QLogic call options. He allegedly made almost $24K from the illicit trades after news of the acquisition went public.

Gupta and Agrawal are settling SEC charges without denying or admitting to the civil charges.

German Stock Change Operator Resolves Insider Trading Probe for $12.5M
Meantime, across the Atlantic, Deutsche Börse will pay approximately $12.5M in fines to settle an investigation into whether insider trading by its CEO occurred prior to the disclosure to the public that the German stock exchange operator was in talks to merge with the London Stock Exchange Group. The merger, which would have established the largest stock market operator in Europe, eventually fell through.

German authorities had been looking into shares bought by Deutsche Börse chief executive Carsten Kengeter in 2015. He and the stock exchange operator have denied wrongdoing. Deutsche Börse’s fines are expected to resolve the insider trading allegations as well as those accusing it of not publishing a regulatory announcement last year.

If you suspect your investment losses may be due to securities fraud, contact The SSEK Partners Group today.

Former PricewaterhouseCoopers Auditor and Relative Charged with Insider Trading, SEC, September 12, 2017

The SEC Complaint in the Insider Trading Case Kennedy and Rezakhani (PDF)

The SEC Complaint Against Shaoul (PDF)

Deutsche Börse to Pay $12.5 Million in Fines in Insider Trading Inquiry, NY Times, September 14, 2017