On January 3, 2024, a judge in the US District Court for the Southern District of New York sentenced Srinivasa Kakkera and Abbas Saeedi for engaging in an insider trading scheme with Amit Bhardwaj, the former Chief Information Security Office for telecom equipment company Lumentum Holdings Inc. Kakkera was sentenced to 18 months in prison, fined $75,000 and ordered to forfeit approximately $2.5 million for his role in the scheme. Saaedi was ordered to serve 5 months in prison, fined $75,000 and must forfeit nearly $700,000 for his role in the scheme. On January 8, 2024, the court also entered a final judgment to resolve the Securities and Exchange Commission’s case against Kakkera in connection with the scheme. According to the judgment, Kakkera agreed, among other things, to be permanently enjoined from violating the antifraud provisions of Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder and, upon the filing of motion by the SEC, agreed to pay disgorgement, prejudgment interest and a civil penalty. The SEC also reserved the right to impose an officer or director bar upon Kakkera.
Kakkera and Saeedi were sentenced just months after they pleaded guilty to conspiracy to commit securities fraud and conspiracy to commit wire fraud in September 2023. The two were indicted in July 2022 for purchasing Neophotonics securities based on material nonpublic information received from Bhardwaj regarding Lumentum’s impending purchase of Neophotonic Corporation. According to court documents, Kakkera, Saaedi and Ramesh Chitor, another of Bhardwaj’s friends, purchased securities before the acquisition was announced publicly. Kakkera also allegedly caused other friends and family members to purchase Neophotonics securities. According to the indictment, they collectively generated approximately $4.3 million in profits from the illegal trades. Federal prosecutors also allege that Bhardwaj, Kakkera and Saeedi took steps to obstruct the federal investigation into their conduct.
Bhardwaj, who was also accused of engaging in a separate insider trading scheme with Dhirenkumar Patel, was sentenced in December 2023 to 24 months in prison. Bhardwaj was also ordered to forfeit approximately $547,000 and pay a fine of $975,000 after pleading guilty to 13 counts of a 14-count indictment for his role in the scheme. Shortly after Chitor and Patel were charged in July 2022, they began cooperating with the government and, in separate settlements, agreed to pay civil penalties and/or disgorgement in amounts that will be determined by the court at a later date. The SEC’s case involving relief defendants also continues.
USAO SDNY Press Release | Docket – Minute Entries | Consent Preliminary Order of Forfeiture/Money Judgment – Kakkera | Consent Preliminary Order of Forfeiture/Money Judgment – Saeedi | Indictment | Judgment (SEC matter) – Kakkera