Trio Charged in $600K Insider Trading Scheme

LOS ANGELES (CN) - A former JPMorgan analyst and two friends were arrested Tuesday after being indicted by a federal grand jury on charges of participating in a $600,000 insider-trading scheme.

Ashish Aggarwal, a 27-year-old investment analyst formerly with JPMorgan Securities' San Francisco office, is accused of using his job to obtain material inside information about upcoming mergers and acquisitions involving publicly traded companies. He then disclosed the information to his friends, LA County residents Shahriyar Bolandian, 26, and Kevan Sadigh, 28, according to the indictment unsealed Tuesday.

Bolandian and Sadigh used the inside information to trade prior to the public announcement of Integrated Device Technology's planned acquisition of PLX Technology in April 2012, and Salesforce.com's acquisition of ExactTarget in June 2013, the indictment says.

The insider trading netting the men over $600,000 in illicit profits, federal prosecutors say. And after being confronted by FBI agents earlier this year, Bolandian and Sadigh gave false explanations of how they came to make such timely trades, the indictment says.

"Every professional with access to inside information has a duty and responsibility to protect that information so no one gains an unfair advantage in the securities markets," U.S. Attorney Eileen Decker said in a statement. "Insider trading corrodes the integrity of the markets and undermines confidence among those who choose to trade. We will bring to justice anyone who illegally uses or shares confidential business information that can be used to manipulate the system."

The men are each charged with one count of conspiracy to commit securities and tender-offer fraud, 13 counts of securities fraud, 13 counts of tender-offer fraud and three counts of wire fraud. Bolandian has also been charged with money laundering.

If convicted, the men face five years in prison on the conspiracy charges and up to 20 years for each of the fraud charges. The money-laundering offense carries a sentence of up to 10 years.

The men surrendered to authorities on Tuesday morning and were scheduled to be arraigned in a Los Angeles federal courtroom later that day.

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