Securities and Exchange Commission v. NATHANIEL BROWN, BENJAMIN WYLAM, NAVEEN SOOD, MARCUS BANNON, MATTHEW RAUCH and NARESH RAMAIYA, Case 5: 21-cv-04594
WASHINTON, DC (STL.News) The Securities and Exchange Commission (SECOND) filed insider trading charges on June 15, 2021 against a Silicon Valley trading network, whose members generated nearly $ 1.7 million in avoided profit and loss trading on confidential earnings information from two local technology companies.
According to the SEC complaint, Nathaniel Brun, who served as director of revenue recognition for Infinera Corporation, has repeatedly shared Infinera’s quarterly earnings and unannounced financial performance with his best friend, Benjamin wylam from April 2016 until Brown left the company in November 2017. SEC complaint alleges high school teacher and bookmaker Wylam traded on this information and tipped Naveen sood, who owed Wylam a six-figure gambling debt. Sood traded on this information and tipped his three friends, Marcus Bannon, Matthieu rauch, and Naresh Ramaiya, everyone has illegally exchanged information.
The SEC complaint further alleges that Bannon informed Sood of material, non-public information regarding Bannon’s employer, Fortinet, Inc. As claimed in the complaint, Bannon learned in early October 2016 that Fortinet was going to unexpectedly announce preliminary negative financial results. Bannon allegedly gave this information to Sood, who used it to trade. After learning the information, Sood tipped Wylam and Ramaiya, who also exchanged.
The SEC complaint accuses Brown, Wylam, Sood, Bannon, Rauch and Ramaiya of violating section 10 (b) of the Securities Exchange Act of 1934 and rule 10b-5 which follows from it. Bannon, Rauch and Ramaiya consented to the entry of final judgments without admitting or denying the allegations of the complaint. Bannon agreed to pay a civil fine of $ 281,497, Rauch agreed to pay a civil fine of $ 128,230, and Ramaiya agreed to pay a civil fine of $ 65,780. Sood also consented to the entry of a final judgment and agreed to pay a civil fine of $ 178,320. The final judgments, which require court approval, would permanently bar Bannon, Rauch, Ramaiya and Sood from violating section 10 (b) of the Securities Exchange Act of 1934 and rule 10b-5 which follows from it. Wylam has consented to a permanent injunction with civil penalties, if any, to be decided later by the court. The SEC’s litigation against Brown continues.
In parallel proceedings, the U.S. District Attorney’s Office for the Northern District of California today announced related criminal charges against Brown, Wylam and Sood.
The SEC investigation was conducted by Colby Steele and David Bennett, along with Matthew Koop, Darren Boerner and Patrick McCluskey, in the Market Abuse Unit of the Enforcement Division. The case was overseen by Paul Kim and Mr. Sansone. The litigation will be led by Alfred Day, Timothy Halloran and Stephan Schlegelmilch. The SEC appreciates the assistance of the United States Attorney’s Office for the Northern District of California and the Federal Bureau of Investigation.