Former Lumentum Executive Sentenced To 24 Months For Insider Trading

 

Amit Bhardwaj Was Sentenced to 24 Months in Prison and Ordered to Pay a Fine of Nearly $1 Million for Misappropriating Information About Impending Corporate Transactions to Trade on that Information and Tip His Associates

Damian Williams, the United States Attorney for the Southern District of New York, announced  that AMIT BHARDWAJ, the former Chief Information Security Officer at Lumentum Holdings Inc. (“Lumentum”), was sentenced by U.S. District Judge Gregory H. Woods to 24 months in prison for his participation in a scheme to commit insider trading based on material, non-public information (“MNPI”) that BHARDWAJ misappropriated from his employer, Lumentum.  BHARDWAJ previously pled guilty to 13 counts relating to the insider trading scheme. 

U.S. Attorney Damian Williams said: “Amit Bhardwaj violated the trust placed in him by his employer by tipping his associates with valuable, non-public information regarding Lumentum’s planned corporate acquisitions. 'This' sentence should serve as a stark reminder to corporate executives regularly entrusted with confidential business information that if you try to illegally profit from this information, you will pay a stiff price.”    

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 purchased Coherent stock and call options, then tipped three associates –– his friend Dhirenkumar Patel, another friend, and one of BHARDWAJ’s close family relatives –– and these individuals all traded in Coherent securities as a result.  BHARDWAJ and Patel agreed that Patel would pay BHARDWAJ 50% of the profits that Patel earned by trading in Coherent based on the MNPI provided by BHARDWAJ.  When Coherent’s stock price increased substantially following the announcement of the Lumentum acquisition, BHARDWAJ, his close family member, his friend Patel, and another friend closed their positions in Coherent securities and collectively profited by nearly $900,000.

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 Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor, and these individuals all subsequently traded in Neophotonics securities.  In connection with Chitor’s trading, BHARDWAJ and Chitor agreed that Chitor and BHARDWAJ would split the profits equally.  When Neophotonics’s 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 collectively made approximately $4.3 million in realized and unrealized profits.

After they were interviewed by the Federal Bureau of Investigation (“FBI”) voluntarily and served with federal grand jury subpoenas on approximately March 29, 2022, BHARDWAJ took steps to obstruct the federal investigation of their conduct.  On the day of the March 29, 2022, FBI interviews, BHARDWAJ drove to the homes of certain of his co-conspirators to encourage them not to tell the federal authorities the truth about their insider trading scheme.  BHARDWAJ and his associates subsequently met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme.  They also created false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.

In addition to the prison sentence, BHARDWAJ, 49, of San Ramon, California, was ordered to forfeit $547,286 and pay a fine of $975,000.

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 BHARDWAJ.