New York, Dec 29 (SocialNews.XYZ) An Indian-American former IT professional has been convicted of four counts of securities fraud in California for using a publicly traded company's confidential inside information about its financial performance to trade in the company's securities.
Sivannarayana Barama, 48, and a co-defendant were charged with securities fraud and conspiracy to commit securities fraud by a superseding indictment in December 2019.
The co-defendant pleaded guilty plea to related charges in 2019.
Barama proceeded to jury trial, and the jury returned its verdicts against him on December 13.
He had participated in an insider trading scheme in which he learned inside information about the quarterly financial performance of NASDAQ-listed Palo Alto Networks before that information was released to the public and then traded in that company's stock while that information was still confidential.
According to evidence presented at trial, Barama formerly worked as a contractor at Palo Alto Networks.
During that time, he met an employee who worked in the company's information technology department, a statement from Attorney Stephanie M Hinds' office said.
From at least October 2016 through September 2017, the employee learned confidential inside information about the company's quarterly revenue and financial performance through his employment.
Trial evidence demonstrated that the Palo Alto Networks employee traded on that confidential information himself in nominee accounts and also provided Barama with the information along with trading instructions.
Barama used the confidential information and trading instructions to purchase Palo Alto Networks stock options.
Once the company publicly announced its earnings for a prior quarter, the stock price reacted to the public disclosure and his earlier option trades promptly became highly profitable.
Barama's trades based on confidential inside information at times resulted in profits of more than five times the amount he invested.
He made profits of $7.3 million on his options trades based on confidential information obtained ahead of four different Palo Alto Networks earnings announcements.
The jury convicted Barama last week of four counts of securities fraud in violation of 18 U.S.C. sections 1348.
For each count, he faces a maximum statutory sentence of 25 years in prison.
However, any sentence will be imposed by the court only after consideration of the US Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. sections 3553.
The jury acquitted Barama of one count of conspiracy to commit securities fraud in violation of 18 U.S.C. sections 1349.
Chief US District Judge Richard Seeborg has not yet set a sentencing hearing date for Barama. He remains free on bond pending his sentencing hearing.
Barama and other traders and participants in the insider trading scheme were named in enforcement actions brought by the US Securities and Exchange Commission in 2019.
Source: IANS
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