Two California Men Sentenced For Insider Trading Using Information Stolen From Lumentum

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SRINIVASA KAKKERA and ABBAS SAEEDI were sentenced by U.S. District Judge Gregory H. Woods to 18 months and five months, respectively, 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.

U.S. Attorney Damian Williams said: “Srinivasa Kakkera and Abbas Saeedi traded on valuable material, non-public information about Lumentum’s planned acquisitions, knowing that their friend had stolen this information from his employer, Lumentum.  Kakkera and Saeedi used their informational advantage to make millions in combined illegal gains in the stock market.  But insider trading is not easy money: if you try to illegally profit from material, non-public information, there’s a price to be paid.”

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, KAKEKRA, 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.

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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. 

Mr. Williams praised the outstanding work of the FBI.  He also acknowledged the assistance of the Securities and Exchange Commission, which separately initiated civil proceedings against KAKKERA and SAEEDI. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Adam Hobson and Noah Solowiejczyk are in charge of the prosecution.