Auditor Charged With Insider Trading on Client’s Nonpublic Information

Discussion in 'Wall St. News' started by dealmaker, Mar 14, 2017.

  1. dealmaker

    dealmaker


    Press Release


    Auditor Charged With Insider Trading on Client’s Nonpublic Information
    FOR IMMEDIATE RELEASE
    2017-66

    Washington D.C., March 14, 2017—

    The Securities and Exchange Commission today announced that an auditor based in the Silicon Valley has agreed to settle charges that he traded on inside information about a client on the verge of a merger.

    The SEC’s order finds that through his work at an independent audit firm, Nima Hedayati learned that Fremont, Calif.-based Lam Research Corporation was making preparations to acquire Milpitas, Calif.-based KLA-Tencor Corporation. The two companies manufacture equipment used in the creation of semiconductors.

    According to the SEC’s order, Hedayati proceeded to purchase out-of-the money call options in KLA common stock in his brokerage account as well as his fiancée’s brokerage account, and he also encouraged his mother to purchase KLA common stock. After merger plans were publicly announced, KLA’s stock price increased nearly 20 percent, and Hedayati and his mother collectively profited by more than $43,000 from the illegal trades. Hedayati’s employer terminated him when it discovered his misconduct.

    “Hedayati abused his important position of trust and responsibility by illicitly trading on an audit client’s nonpublic information in a quest for an easy profit, and it wound up costing him a lot more in the end,” said Jina Choi, Director of the SEC’s San Francisco Regional Office.

    Without admitting or denying the SEC’s findings, Hedayati agreed to pay disgorgement of $43,027.59 plus $1,269.70 in interest and a $43,027.59 penalty for a total of more than $87,000. Hedayati agreed to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC’s order permits him to apply for reinstatement after five years.

    The SEC’s investigation was conducted by Matthew Meyerhofer and supervised by Tracy L. Davis in the San Francisco office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
     
  2. Overnight

    Overnight

    Scumbag. Why do so many people try to cheat? Stop with the cheating! Why why why!
     
    dealmaker likes this.
  3. So did his employer find out and turn it over to the SEC or did they catch him? Surprising that was enough size to alert them of anything if so, but I guess they review everything heavily around mergers.
     
  4. carl0215

    carl0215

    Was this the same guy guaranteeing a 1000 point drop in the Dow?
     
  5. motif

    motif

    Why stop cheating? Because it's human nature to do so.
     
  6. carl0215

    carl0215

    Probably. Who else would make any future guarantees besides George Zimmer and they canned his ass.
     
  7. Overnight

    Overnight

    Hashtag Sad.
     
  8. carl0215

    carl0215

    Bump
     
  9. carl0215

    carl0215

    Bump