The Securities and Exchange Commission is charging ex- J. P. Morgan Securities, LLC (JPMS) bank analyst Ashish Aggarwal with illegally tipping confidential information about firm clients in impending acquisitions and mergers involving technology companies to his friend Shahriyar Bolandian. Bolandian then purportedly used the information to trade in his own accounts and in the accounts of his sister and father, while also tipping his friend Kevan Sadigh so that he too could insider trade. Together, Bolandian and Sadigh allegedly made over $672,000 in illicit profits. The regulator is also charging them both with insider trading.
According to the SEC Complaint, Aggarwal misappropriated confidential information about two deals in which J.P. Morgan had served as an adviser. After notifying Bolandian, the latter and Sadigh purchased the same call options in two companies: PLX Technology and ExactTarget. The two men allegedly traded prior to the public announcement of PLX Technology Inc.’s intended acquisition by Integrated Device Technology Inc. in 2012 and ExactTarget’s acquisition by Salesforce.com and PLX Technology in 2013.
The trades frequently occurred within minutes or hours of each other and they usually were 100% of the daily trading volume of the option series. The illicit money that was purportedly earned is said to have gone toward covering past trading losses and pay back the debts of Bolandian and Aggarwal. The SEC is accusing the three men of exploiting J.P. Morgan and its clients by engaging in insider trading.
Earlier this week, they were taken into custody after a federal grand jury indictment accused them for allegedly taking part in the insider trading scheme. Each of them has been charged with one count of conspiracy to commit securities fraud, tender offer fraud, multiple counts of securities fraud and tender offer fraud, and three counts of wire fraud. Bolandian is also charged with money laundering. All of them have pleaded not guilty to the criminal charges.
SEC Complaint (PDF)
Former Investment Banking Analyst and Two Friends Charged in Insider Trading Scheme, Justice.gov, August 25, 2015