SEC announces final judgments obtained against California couple charged with insider trading

The Securities and Exchange Commission announced on June 1, 2022 that final judgments were recently entered in the District Court for the Central District of California against Los Angeles residents Mohammed “Mo” Pithapurwala and his wife Alifiya Kutiyanawalla regarding insider trading charges connected with alleged unlawful securities trades involving Snap, Inc., a camera and social media company, ahead of positive earnings announcement in 2018.  

According to the SEC’s complaint, Pithapurwala, a lead engineer for Snap during the relevant time period, had access to material non-public information concerning Snap’s fourth quarter and year-end 2017 financial results.  While Pithapurwala was prohibited from trading in Snap securities during a pre-established blackout period and from trading in Snap options at any time, Pithpurwala allegedly asked his sister-in-law Ammar, who was living in India at the time, to purchase Snap options in exchange for a portion of the profits.  The SEC further alleged that, in order to conceal their role in the trades, Pithapurwala and his wife transferred $20,000 to Ammar through intermediaries in multiple transfers over the course of a week.  According to the complaint, on February 5 and 6 of 2018, Ammar purchased $24,000 of short-date, out-of-the-money call options based on Pitapurwala’s tip, just before Snap announced its positive earnings results after the markets closed on February 6, 2018.  When Ammar sold all of the options in the following days, she realized profits of more than $261,000, a 1088 percent return on the original investment.

In its complaint, the SEC charged Pathapurwala and Alifiya with violating section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder and with aiding and abetting the anti-fraud violations.  Without admitting or denying the allegations in the complaint, Pithapurwala and Alifiya consented to the entry of judgment that permanently enjoined them from further violations of the anti-fraud provisions.  Pitapurwala also agreed to pay a $523,031 civil penalty while his wife agreed to pay $75,000.

SEC Press Release | SEC Complaint | Final Judgment - Pithapurwala | Final Judgment - Kutiyanawalla

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