The US Securities and Exchange Commission has charged two Ontario, Canada-based software engineers with insider trading. Harpreet Saini, a citizen of India, and John Lester Mandac Natividad, a Canadian national, were employed as software developers by Intrado Corporation. Intrado’s business incorporated a press release platform called GlobeNewswire, on which corporate press releases, financial disclosures and multimedia content were processed and disseminated.
According to the complaint, Saini and Natividad had access to the GlobeNewswire press release platform, and could view the issuer’s name and the scheduled time for publication of announcements on the platform. The complaint alleges that, despite having read and signed Intrado’s confidentiality and insider trading policies, and despite the company’s restrictions on the use of personal electronic devices for business purposes, the defendants exchanged information on Whatsapp concerning at least 215 publicly traded companies, sharing headlines and discussing how they could trade profitably on market reaction to publication of the news. Altogether, according to the complaint, Saini and Natividad traded in advance of hundreds of market-moving announcements issued by Intrado’s clients, receiving profits of at least $864,773 and $657,352 respectively, between May 2018 and July 2021. In addition, as alleged in the complaint, Natividad used material nonpublic information obtained in the course of his work at Intrado to trade on his mother’s account, receiving trading profits of at least $51,055 between June 2019 and July 2021.
Saini and Natividad are charged with violating Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder because they knew or were reckless in not knowing that the information they used to trade on was both material and nonpublic, and because they breached the duty of trust or confidence they owed their employer, Intrado, by trading on the information. Saini and Natividad have also been charged by the Ontario Securities Commission with insider trading and fraud offenses under Canadian law.