Former business executive of Indian origin pleads guilty to insider trading

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Amit Bhardwaj, a former executive of Lumentum Holdings Inc., was arrested and charged in July 2022 and pled guilty March 22, 2023, before U.S. District Judge Gregory H. Woods, to 13 counts arising from his participation in a scheme to commit insider trading based on material, non-public information that he misappropriated from his employer.

Bhardwaj’s guilty plea was announced by Damian Williams, the United States Attorney for the Southern District of New York.

Bhardwaj, 49, of San Ramon, California, pled guilty to seven counts of securities fraud and two counts of wire fraud, each of which carries a maximum term of 20 years in prison, and four counts of conspiracy to commit securities fraud and wire fraud, each of which carries a maximum term of five years in prison.

The former Chief Information Security Officer at Lumentum not only traded himself on the misappropriated material non-public information but also tipped his associates with this same information so that they could place profitable trades in Lumentum’s acquisition targets.

According to the allegations in the Indictment and statements made in public court proceedings, quoted in the press release, in approximately December 2020, Bhardwaj learned that Lumentum was considering acquiring Coherent, Inc.

Based on this information, he himself purchased Coherent stock and call options, and tipped three associates –– his friend Dhirenkumar Patel, another friend, and one of Bhardwaj’s close family relatives. All of them traded in Coherent securities as a result.

Bhardwaj and Patel agreed that Patel would pay Bhardwaj 50% of the profits that Patel earned by trading. When Coherent’s stock price increased substantially following the announcement of the Lumentum acquisition, Bhardwaj, his close family member, his friend Patel, and another friend closed their positions in Coherent securities and collectively profited by nearly $900,000, the press release said.

In another instance, around October 2021, Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation about a potential acquisition.  He provided this information to Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor, and these individuals all traded in Neophotonics securities as a result.  In connection with Chitor’s trading, Bhardwaj and Chitor agreed that the two of them would split the profits equally.  When Neophotonics’ stock price increased substantially following the announcement of the Lumentum acquisition in November 2021, Kakkera, Saeedi, and Chitor closed their positions in Neophotonics securities and made collectively approximately $4.3 million in realized and unrealized profits.

After they were interviewed by the FBI voluntarily and served with federal grand jury subpoenas on approximately March 29, 2022, Bhardwaj took steps to obstruct the federal investigation of their conduct.  On the day of the March 29, 2022, FBI interviews, Bhardwaj drove to the homes of certain of his co-conspirators to encourage them not to tell the federal authorities the truth about their insider trading scheme, the press release said.