US Attorney in New York announces sentencing of two California men for insider trading

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The United States Attorney for the Southern District of New York, announced January 3, 2024, that Srinivasa Kakkera and Abbas Saeedi were sentenced by U.S. District Judge Gregory H. Woods to 18 months and five months, respectively. The sentences were for their participation in a scheme to commit insider trading based on material, non-public information (“MNPI”) that a third co-defendant, Amit Bhardwaj, misappropriated from Bhardwaj’s employer, Lumentum Holdings Inc. (“Lumentum”).

Judge Woods previously sentenced Bhardwaj to 24 months in prison and a fine of $975,000.

The press release noted that according to the allegations in the Indictment and statements made in public court proceedings:

In approximately December 2020, Bhardwaj learned that Lumentum was considering acquiring Coherent, Inc (“Coherent”).  Based on this information, Bhardwaj himself purchased Coherent stock and call options, and Bhardwaj tipped three associates, including Saeedi, and these individuals all traded in Coherent securities as a result.

In or about October 2021, Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (“Neophotonics”) about a potential acquisition.  Bhardwaj provided this information to Kakkera, Saeedi, and Ramesh Chitor, and these individuals all traded in Neophotonics securities.  Kakkera also caused other friends and family to purchase Neophotonics securities.  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.  In particular, Kakkera made $2,453,687.99 and Saeedi made $691,104.73.

After they were interviewed by the Federal Bureau of Investigation (“FBI”) and served with federal grand jury subpoenas on approximately March 29, 2022, Bhardwaj, Kakkera and SAEEDI took steps to obstruct the federal investigation of their conduct.  They met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme as well as creating false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme, the press release said.

In addition to the prison sentence, Kakkera, 48, of Pleasanton, California, was ordered to forfeit $2,453,687.99.  Saeedi, 48, of Fremont, California, was ordered to forfeit $691,104.73.