SEC Halts Alleged Insider Trading Ring Spanning Three Countries
The Securities and Exchange Commission has filed insider trading charges against an IT contractor and two others he illegally tipped with confidential client information he stole while working in the Singapore branch of an investment bank.
The SEC obtained a court-ordered freeze of assets in three U.S. brokerage accounts and one U.S. bank account connected to the alleged trading. The SEC's complaint alleges that Rajeshwar Gannamaneni provided nonpublic information about impending mergers, acquisitions, and tender offers to his wife, Deepthi Gandra, and his father, Linga Rao Gannamaneni, who lives in India. Gannamaneni also allegedly traded in an account that he controlled that was opened in the name of a family member, who was living in the U.S. at the time. According to the allegations in the SEC's complaint, the three collectively reaped approximately $600,000 in profits by trading while in possession of inside information in advance of at least 40 corporate events.
"As alleged in our complaint, Gannamaneni abused his work-related access to sensitive, market-moving nonpublic information to enrich himself and those he tipped," said Kelly L. Gibson, Associate Director of Enforcement in the SEC's Philadelphia Regional Office. "Our continued use of innovative analytical tools to find suspicious trading patterns and expose misconduct demonstrates our resolve to catch insider traders who seek to take illegal advantage of the U.S. markets for personal gain."
The SEC's complaint charges the defendants with fraud and seeks disgorgement of allegedly ill-gotten gains, pre-judgment interest, penalties, and injunctive relief.
The SEC's continuing investigation was conducted by Polly Hayes and Assunta Vivolo of the Philadelphia Office, with assistance from John Rymas and Pat McCluskey of the Market Abuse Unit’s Analysis and Detection Center. The case was supervised by Ms. Gibson. Julia C. Green, Karen Klotz, and Jennifer C. Barry will lead the SEC's litigation. The SEC appreciates the assistance of the Financial Industry Regulatory Authority and the Monetary Authority of Singapore.