SAN FRANCISCO – A federal jury convicted Sivannarayana Barama, a former IT skilled at a number of Silicon Valley expertise companies, of 4 counts of securities fraud for utilizing a publicly traded firm’s confidential inside details about its monetary efficiency to commerce within the firm’s securities, introduced United States Legal professional Stephanie M. Hinds and Federal Bureau of Investigation Particular Agent in Cost Robert Okay. Tripp. The responsible verdicts adopted a one-week trial earlier than Chief United States District Decide Richard Seeborg.
Barama and a co-defendant had been charged with securities fraud and conspiracy to commit securities fraud by a superseding indictment in December 2019. The co-defendant pleaded responsible plea to associated costs in 2019. Barama proceeded to jury trial, and the jury returned its verdicts in opposition to Barama on December 13, 2022.
Palo Alto Networks Inc. is a public firm headquartered in Santa Clara, Calif., and listed on the NASDAQ alternate. Based on the superseding indictment’s allegations, Barama, 48, of Fremont, Calif., participated in an insider buying and selling scheme wherein he realized inside details about the quarterly monetary efficiency of Palo Alto Networks earlier than that info was launched to the general public after which traded in that firm’s inventory whereas that info was nonetheless confidential.
Based on proof introduced at trial, Barama previously labored as a contractor at Palo Alto Networks. Throughout that point he met an worker who labored within the firm’s info expertise division. From a minimum of October 2016 by September 2017, the worker realized confidential inside details about the corporate’s quarterly income and monetary efficiency by his employment.
Trial proof demonstrated that the Palo Alto Networks worker traded on that confidential info himself in nominee accounts and in addition supplied Barama with the data together with buying and selling directions. Barama used the confidential info and buying and selling directions to buy Palo Alto Networks inventory choices. As soon as the corporate publicly introduced its earnings for a previous quarter, the inventory value reacted to the general public disclosure and Barama’s earlier possibility trades promptly turned extremely worthwhile. Barama’s trades primarily based on confidential inside info at instances resulted in income of greater than 5 instances the quantity he invested. Barama in the end made income of $7.3 million on his choices trades primarily based on confidential info obtained forward of 4 completely different Palo Alto Networks earnings bulletins.
The jury convicted Barama of 4 counts of securities fraud in violation of 18 U.S.C. § 1348. For every depend, Barama faces a most statutory sentence of 25 years in jail. Nevertheless, any sentence might be imposed by the court docket solely after consideration of the U.S. Sentencing Tips and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The jury acquitted Barama of 1 depend of conspiracy to commit securities fraud in violation of 18 U.S.C. § 1349.
Chief U.S. District Decide Seeborg has not but set a sentencing listening to date for Barama. Barama stays free on bond pending his sentencing listening to.
Barama and different merchants and members within the insider buying and selling scheme had been named in enforcement actions introduced by the US Securities and Change Fee in 2019.
Assistant U.S. Attorneys Garth Rent and Lloyd Farnham prosecuted the case with the help of Mark DiCenzo. The prosecution is the results of an investigation by the FBI, with the help of the San Francisco Regional Workplace of the Securities and Change Fee. The U.S. Legal professional’s Workplace acknowledges and appreciates the help at trial supplied by the SEC’s Division of Financial and Danger Evaluation and by the Monetary Trade Regulatory Authority (FINRA) and its Legal Prosecution Help Group.
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