Three Indians Charged in US in Insider Trading Ring Spanning 3 Countries

New York: An Indian IT contractor, his wife and father have been charged in the US with insider trading after he illegally tipped them with confidential client information he stole while working in the Singapore branch of an investment bank.

Rajeshwar Gannamaneni, 36, is a citizen of India with a last known residence in Singapore. He provided non-public information about impending mergers, acquisitions, and tender offers to his wife, Deepthi Gandra, 33 and his father, Linga Rao Gannamaneni, 68 who lives in India, The Securities and Exchange Commission (SEC) said in a statement.

The SEC obtained a court-ordered freeze of assets in three US brokerage accounts and one US bank account connected to the alleged trading. The SEC's complaint alleges that between December 2013 and August 2016, Gannamaneni abused his position as a senior software consultant at the investment bank and accessed sensitive, highly-confidential information concerning at least 40 mergers, acquisitions, tender offers and other significant corporate events of the investment bank's clients.

Gannamaneni then illegally traded on that information and shared it with his father and wife who unlawfully traded on it, collectively realizing illicit profits of about USD 600,000.

He also allegedly traded in an account that he controlled that was opened in the name of a family member, who was living in the US at the time. Gannamaneni asked this family member, a cousin who at the time lived in Virginia, to open an investment account at an American brokerage firm, so that he could place trades in this account from Singapore.

"As alleged in our complaint, Gannamaneni abused his work-related access to sensitive, market-moving nonpublic information to enrich himself and those he tipped," said Kelly L. Gibson, Associate Director of Enforcement in the SEC's Philadelphia Regional Office. "Our continued use of innovative analytical tools to find suspicious trading patterns and expose misconduct demonstrates our resolve to catch insider traders who seek to take illegal advantage of the U.S. markets for personal gain."

The SEC's complaint charges the defendants with fraud and seeks disgorgement of allegedly ill-gotten gains, pre-judgment interest, penalties, and injunctive relief.