On September 5, 2023, Srinivasa Kakkera pleaded guilty to count 7 of a 14-count indictment for his alleged participation in an insider trading scheme with Amit Bhardwaj, the former Chief Information Security Officer of California-based Lumentum Holdings Inc., a telecommunications equipment company. On September 7, 2023, his codefendant Abbas Saeedi pleaded guilty to count 8 of the same indictment for his involvement in the scheme. Both pleaded guilty to conspiracy to commit securities fraud and conspiracy to commit wire fraud and are currently scheduled to be sentenced on January 3, 2024.
In July 2022, the Securities and Exchange Commission and the US Attorney’s Office for the Southern District of New York charged a total of five defendants in connection with in two separate insider trading schemes involving Bhardwaj. According to court documents, Dhirenkumar Patel and Ramesh Chitor purchased securities in Coherent, Inc. based on a tip from Bhardwaj, who obtained material nonpublic information (“MNPI”) in late 2020 regarding Lumentum’s planned acquisition of Coherent. As a result of their illegal trades, Patel and Chitor realized nearly $900,000 in illegal profits, and allegedly shared a portion of those profits with Bhardwaj. Later, in October 2021 , Bhardwaj allegedly shared MNPI regarding Lumentum’s planned acquisition of Neophotonics with friends Kakkera, Saeedi and Chitor, who all purchased Neophotonics securities based on the tip. After the acquisition was announced in November 2021, they allegedly generated combined illegal profits of more than $4.3 million.
In July 2022, the US Attorney’s Office reported that Patel and Chitor pleaded guilty to the criminal charges against them and were cooperating with the US government in the case. A few months later, in October 2022, Patel and Chitor settled with the SEC and consented to the entry of judgments against them. In separate judgments, they agreed to be permanently enjoined from further securities violations. They also agreed to pay civil penalties and/or disgorgement, with prejudgment interest, in amounts to be determined by the court.
More recently, in March 2023, Bhardwaj pleaded guilty to 13 of the 14 counts charged in the indictment, including securities fraud and wire fraud . Bhardwaj is currently scheduled to be sentenced on November 28, 2023. He also settled with the SEC, in August 2023, and consented to the entry of judgment against him. According to the judgment, he agreed to a permanent injunction and agreed to pay a civil penalty and/or disgorgement with prejudgment interest in amounts determined by the court. Bhardwaj also consented to be barred from acting as an officer or director of a registered company.
The SEC’s case against Kakkera and Saeedi continues.