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Two sentenced to prison in Lumentum insider trading case
In addition to the prison sentence, Kakkera, 48, of Pleasanton, California, was ordered to forfeit US$ 2,453,687.99; and Saeedi, 48, of Fremont, California, was ordered to forfeit US$ 691,104.73
Representative image / image - iStock
Two Indian Americans from California Srinivasa Kakkera and Abbas Saeedi were sentenced to jail terms by US District Judge Gregory H. Woods for insider trading using information stolen from Lumentum Holdings Inc.
Kakkera was sentenced to 18 months in prison, and Saeedi was sentenced to 5 months for committing insider trading based on material, non-public information (MNPI) that a third co-defendant, Amit Bhardwaj, misappropriated from his employer, Lumentum Holdings Inc.
According to a statement by US Attorney for the Southern District of New York Damian Williams, Judge Woods previously sentenced Bhardwaj to 24 months in prison and a fine of US$ 975,000.
US Attorney Damian Williams said, “Srinivasa Kakkera and Abbas Saeedi traded on valuable material, non-public information about Lumentum’s planned acquisitions, knowing that their friend had stolen this information from his employer, Lumentum. Kakkera and Saeedi used their informational advantage to make millions in combined illegal gains in the stock market. But insider trading is not easy money: if you try to illegally profit from material, non-public information, there’s a price to be paid.”
In addition to the prison sentence, Kakkera, 48, of Pleasanton, California, was ordered to forfeit US$ 2,453,687.99; and Saeedi, 48, of Fremont, California, was ordered to forfeit US$ 691,104.73.
In around December 2020, Bhardwaj had purchased Coherent stock and call options, after having learned that Lumentum was considering acquiring Coherent, Inc (Coherent). He tipped three associates, including Saeedi, and these individuals all traded in Coherent securities as a result.
In October 2021, Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (Neophotonics) about a potential acquisition. He provided this information to Kakkera, Saeedi, and Ramesh Chitor, and these individuals all traded in Neophotonics securities.
When Neophotonics’ stock price increased substantially following the announcement of the Lumentum acquisition in November 2021, Kakkera, Saeedi, and Chitor closed their positions in Neophotonics securities and made approximately US$ 4.3 million in realized and unrealized profits. Of which, Kakkera made US$ 2,453,687.99 and Saeedi made US$ 691,104.73.
Following the investigation by the Federal Bureau of Investigation (FBI) and served with federal grand jury subpoenas on approximately March 29, 2022, the three individuals took steps to obstruct the federal investigation of their conduct. They met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme as well as creating false documents.
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