Damian Williams, United States Attorney for the Southern District of New York | U.S. Department of Justice
The former Chief Information Security Officer at Lumentum Holdings Inc. has pleaded guilty to multiple charges related to his role in an insider-trading scheme resulting in more than $4 million in illegal profit for friends and family, the U.S. Department of Justice announced March 22.
“Amit Bhardwaj, the former Chief Information Security Officer of Lumentum, ironically failed to keep the confidential information he was trusted with secure as he shared it with numerous friends and a family member in order to make a profit,” DOJ attorney Damian Williams said in the news release.
“Not only did Bhardwaj betray his company and cheat the securities markets," Williams said, "but when confronted by the FBI, he also schemed to conceal his illicit behavior and obstruct the investigation. Today’s guilty plea emphasizes this Office’s commitment to protecting the integrity of the financial markets.”
Bhardwaj, 49, of San Ramon, Calif., entered guilty pleas to 13 counts, the release reports - seven counts of securities fraud and two counts of wire fraud, each of which carries a maximum 20-year prison sentence; and four counts of conspiracy to commit securities fraud and wire fraud, each of which carries a maximum five-year prison sentence.
Court documents show that beginning in December 2020, Bhardwaj learned Lumentum was considering the acquisition of Coherent, Inc., and purchased Coherent stock and call options. He also advised Dhirenkumar Patel, another friend and a close family cousin to trade in Coherent securities, the news release states. The four men subsequently sold their Coherent equities after the news of the acquisition by Lumentum and made a combined profit of almost $900,000.
In or around October 2021, Bhardwaj also discovered that Lumentum and Neophotonics Corp. were conducting private negotiations about a possible transaction, according to court records. Bhardwaj passed the information to Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor, all of whom traded in Neophotonics stocks as a result of the insider information. With the news of the Lumentum acquisition in November 2021, Neophotonics' stock price rose significantly. Afterward, Kakkera, Saeedi and Chitor sold their holdings at a total profit of around $4.3 million in realized and unrealized gains.
Bhardwaj attempted to obstruct the investigation by the Federal Bureau of Investigation (FBI) after being interviewed and served with federal grand jury subpoenas on approximately March 29, 2022, by going to the homes of certain co-conspirators on that same day to "encourage them not to tell the federal authorities the truth about their insider trading scheme," the release reports.
"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 as well as creating false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme," the news release states.
Bhardwaj was arrested and charged in July 2022. He is scheduled to be sentenced by U.S. District Judge Gregory H. Woods. on July 11.
