$16M in Fines for Ross Stores Inside-Trading

SAN FRANCISCO (CN) — Two men at the center of a $12 million insider trading scheme involving Ross Stores stock were fined more than $16 million on Wednesday.
The Securities and Exchange Commission sued lead defendant Saleem Khan, Roshanlal Chaganlal and four others for their roles in the allegedly illegal trading plot in June 2014.
The SEC says Khan shared inside tips on Ross Stores stock with co-defendants Ammar Akbari and Ranjan Mendosa. Khan got the tips from his friend Chaganlal, who worked as finance director at Ross headquarters in Dublin, California, according to the SEC.
Khan realized profits of $5.4 million in his own account and $6 million in his brother-in-law’s account, which he also controlled, the lawsuit claimed.
Khan and Chaganlal agreed to pay fines and accept a permanent ban on violating securities laws as part of an agreement to end the litigation earlier this month.
In a Sept. 21 ruling, U.S. District Judge Haywood Gilliam Jr. ordered Khan to pay the SEC $15.8 million in disgorgement and penalties.
The judge also barred Chaganlal from serving as director or officer for any firm that trades stock for the next 10 years and ordered him to pay $274,680 in fines.
In September last year, Gilliam fined two other defendants — Akbari and Mendosa — more than $600,000 for their roles in the scheme.
After issuing final judgments against the two remaining defendants Wednesday, Gilliam ordered the clerk to close the case, ending more than two years of litigation.
Khan’s attorney, Christopher Cannon, and Chaganlal, who represented himself pro se, did not immediately return phone calls seeking comment Wednesday afternoon.
Judith Burns of the SEC declined to comment on the case.

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