Mary Carollo: Investment Bank Vice President Charged with Insider Trading

The Securities and Exchange Commission charged a vice president in the risk management department of a Utah-based investment bank with insider trading on confidential information he learned in advance of a private equity firm’s acquisition of a publicly-traded technology company.

The SEC alleges that Avaneesh Krishnamoorthy learned that Golden Gate Capital planned to acquire Neustar Inc., and he then began trading in Neustar securities. The trading took place in two brokerage accounts that Krishnamoorthy allegedly kept hidden from his employer, which had been approached by Golden Gate Capital to finance the transaction. According to the SEC’s complaint, Krishnamoorthy made approximately $48,000 in illicit profits.

“As alleged in our complaint, Krishnamoorthy was entrusted with confidential, market-moving information by his employer and he misused it for personal gain,” said Andrew M. Calamari.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Utah today filed criminal charges against Krishnamoorthy.

The SEC is seeking an emergency court order to freeze the assets in the brokerage accounts belonging to Krishnamoorthy and his wife, who has been named as a relief defendant in the SEC’s complaint for purposes of recovering allegedly ill-gotten gains in the account in her name. The complaint charges Krishnamoorthy with violating Section 17(a) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

The SEC’s investigation is being conducted by Alison R. Levine, Preethi Krishnamurthy, Neil Hendelman, and Thomas P. Smith Jr. The litigation will be led by Ms. Krishnamurthy and Ms. Levine. The case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of Utah, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

If you need help with an Insider Trading charge against you, you will need help from a Criminal Lawyer. If you’re in that situation, call Ascent Law, we’ll help you.

PORTFOLIO MANAGER CHARGED WITH DIVERTING NEARLY $2 MILLION TO PERSONAL ACCOUNT

The Securities and Exchange Commission today announced fraud charges against a Utah-based portfolio manager accused of diverting at least $1.95 million to his personal brokerage account from a fund over which he had trading authority.

The SEC’s complaint alleges that Kevin J. Amell carried out a fraudulent matched-trades scheme in which he prearranged the purchase or sale of call options between his own account and the brokerage accounts of the fund at prices that were disadvantageous to the fund and advantageous to him. In one series of trades involving Amazon securities, for example, Amell allegedly generated a $23,000 profit for himself in less than 23 minutes at the fund’s expense.

“As alleged in our complaint, Amell abused his trading authority at least 265 times by matching trades between the fund and his personal account at prices that he intentionally and fraudulently skewed to benefit himself,” said Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit.

In a parallel action, the U.S. Attorney’s Office for the District of Utah today filed criminal charges against Amell.

The SEC’s complaint charges Amell with violating Sections 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c), and Sections 17(a)(1), 17(a)(2) and 17(j) of the Investment Company Act of 1940 and Rules 17j-1(b)(1), (3) and (4). The SEC is seeking disgorgement of Amell’s ill-gotten gains plus interest and penalties as well as injunctions.

The SEC’s investigation, which is continuing, is being conducted by Melanie A. MacLean, John D. Marino, and Simona Suh of the Market Abuse Unit and Elzbieta Wraga of the Utah Regional Office. The case has been supervised by Mr. Sansone. The litigation will be led by Ms. MacLean, Ms. Suh, and Martin F. Healey of the Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Utah, the Federal Bureau of Investigation’s Boston Field Office, and the Financial Industry Regulatory Authority.

If you want to be represented by a Utah Securities Lawyer, call Ascent Law today for your free consultation.

SEC AWARDS NEARLY $4 MILLION TO WHISTLEBLOWER

The Securities and Exchange Commission today announced an award of nearly $4 million to a whistleblower who tipped the agency with detailed and specific information about serious misconduct and provided additional assistance during the ensuing investigation, including industry-specific knowledge and expertise.

“Not only did this whistleblower step forward and report suspicious conduct, but continued to help after we opened our investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Whistleblowers with specialized experience or expertise can help us expend fewer resources in our investigations and bring enforcement actions more efficiently.”

Approximately $153 million has now been awarded to 43 whistleblowers who became eligible for an award after voluntarily providing the SEC with original and useful information that led to successful enforcement actions.

SEC enforcement actions from whistleblower tips have resulted in more than $953 million in financial remedies against wrongdoers.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. If you need help from an MLM Lawyer, give us a call for help.

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