Former Lumentum executive sentenced to 24 months for insider trading

According to the allegations in the Indictment and statements made in public court proceedings, laid out in the press release:

In approximately December 2020, Bhardwaj learned that Lumentum was considering acquiring Coherent, Inc (“Coherent”).  Based on this information, Bhardwaj purchased Coherent stock and call options, then tipped three associates –– his friend Dhirenkumar Patel, another friend, and one of Bhardwaj’s close family relatives –– and these individuals all 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 in Coherent based on the MNPI provided by Bhardwaj.  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.

In or about October 2021, Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (“Neophotonics”) about a potential acquisition. He provided this information to Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor, and these individuals all subsequently traded in Neophotonics securities.

In connection with Chitor’s trading, Bhardwaj and Chitor agreed that the two would split the profits equally.  When Neophotonics’s 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 collectively made approximately $4.3 million in realized and unrealized profits.

After they were interviewed by the Federal Bureau of Investigation (“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, the press release said.  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.  Bhardwaj and his associates subsequently met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme.  They also created false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.

The Securities and Exchange Commission has separately initiated civil proceedings against Bhardwaj, the press release said