Indian-origin techies booked for insider trading in US

In USA, Seven Indian-origin people in California were charged by the US Securities and Exchange Commission (SEC), on Monday with insider trading via a scheme and making illegal profits worth over $1 million. According to the SEC’s complaint, three people identified as Hari Prasad Sure , Lokesh Lagudu  and Chotu Prabhu Tej Pulagam are friends and worked as software engineers at a California-based cloud computing company Twilio. The three colleagues at Twilio had access to various databases relevant to the company’s reporting of revenue.

As alleged, around March 2020, they learned through the databases that Twilio's customers had increased their usage of the company's products and services in response to health measures taken in light of the Covid-19 pandemic, and concluded in a joint chat that Twilio's stock price would "rise for sure." The SEC's complaint alleges that despite receiving a company policy that prohibited them from insider trading, Mr Sure, Mr Lagudu and Mr Chotu Pulagam knowingly tipped off, or used the brokerage accounts of  Kamujula, Ms Nekkalapudi,  Dharmapurikar and Chetan Pulagam to trade Twilio options and stock in advance of its May 6, 2020 earnings announcement while in possession of the confidential information concerning customer usage.

The SEC complaint said that  Sure,  Lagudu and Chotu Pulagam "communicated at times in Telugu, a language used frequently in parts of India." From late March to early May 2020, they engaged in discussions about the upcoming earnings announcement within a private chat channel they created at Twilio. The SEC's complaint, filed in the Northern District of California, charges each of the defendants with violating anti-fraud provisions of the Securities Exchange Act. The US Attorney's Office for the Northern District of California also announced criminal charges against  Kamujula.