December 13, 2023

Former chief information security officer for Lumentum gets 24 months in prison for insider trading

On December 9, 2023, Amit Bhardwaj, the former Chief Information Security Officer (“CISO”) for telecommunications equipment company Lumentum Holdings Inc. was sentenced in the US District Court for the Southern District of New York to 24 months in prison for his involvement in a scheme to commit insider trading.  In addition to the prison sentence, Bhardwaj was ordered to forfeit approximately $547,000 and pay a fine of $975,000.  Bhardwaj pleaded guilty to 13 counts of a 14-couunt indictment for his role in the scheme in March 2023, which included 7 counts of securities fraud, 2 counts of wire fraud, and 4 counts of securities and wire fraud conspiracy.

In July 2022, the Securities and Exchange Commission charged Bhardwaj and his friends Dhirenkumar Patel, Srinivasa Kakkera, Abbas Saeedi and Ramesh Chitor with insider trading for allegedly placing improper trades based on MNPI obtained ahead of Lumentum’s planned acquisitions of Coherent, Inc. in 2020 and the NeoPhotonic Corporation in 2021.  At the same time, the US Attorney Office for the Southern District of New York also filed parallel criminal charges against Bhardwaj and his four friends in connection with the illegal trades.  Bhardwaj was accused of purchasing Coherent securities prior to the acquisition and sharing the MNPI with his friend Patel in exchange for a promise to share in the profits.  Bhardwaj also provided Patel with some of the funds used to purchase Coherent securities – purchases that allegedly resulted in Bhardwaj, his wife and Patel generating approximately $900,000 in illicit gains after the acquisition was announced in January 2021.  In a second scheme, Bhardwaj allegedly tipped Kakkera, Saeedi and Chitor based on MNPI received regarding Lumentum’s impending purchase of NeoPhotonic.  When the acquisition was announced in November 2021, the friends collectively made approximately $4.3 million in realized and unrealized profits – profits that were allegedly shared with Bhardwaj.  Federal investigators also accuse Bhardwaj of taking steps to obstruct their investigation.

Shortly after the charges were filed in July of 2022, Patel and Chitor separately pleaded guilty to the charges against them and began cooperating with the government in the case.   In September 2023, Kakkera and Saeedi pleaded guilty to conspiracy to commit securities fraud and conspiracy to commit wire fraud.  The two are currently scheduled to be sentenced on January 3, 2024.

In September 2023, the SEC entered into a settlement with Bhardwaj in which he agreed to be permanently enjoined from committing further securities violations and agreed to pay civil penalties and/or disgorgement in amounts to be determined by the court.  On October 30, 2023, the SEC reached similar settlements with Patel, Saeedi and Chitor, who agreed to pay civil penalties and/or disgorgement in amounts to be determined at a later date.  In addition, on November 30, 2023, a proposed settlement was filed in an effort to settle the SEC’s charges against Kakkera that leaves the monetary relief open for resolution at a later time.  The SEC’s case involving certain relief defendants also continues.

USAO SDNY Press Release