Seven of Indian origin in U.S. charged with insider trading


Federal authorities in the US have charged seven Indian-origin persons who were involved in insider trading through which they made over a million dollars illegally.

Among the seven individuals, three were employees of a San Francisco-based cloud computing communications company, Twilio, announced U.S. Attorney Stephanie M. Hinds, and Federal Bureau of Investigation Acting Special Agent in Charge Timothy M. Stone.

Hari Prasad Sure, 34, Lokesh Lagudu, 31 and Chotu Prabhu Tej Pulagam, 29, are friends and worked as software engineers at Twilio.

Dileep Kumar Reddy Kamujula, 35, a resident of East Bay, was the key member who traded in Twilio’s options with the three employees.

US Attorney Hinds said, “The charges in this indictment relate to a scheme to profit on the confidential information of a San Francisco-based public company to gain an illegal edge in the stock market.”

“This Office will continue to aggressively pursue this type of securities fraud because it threatens the integrity of the markets and hurts everyone who plays by the rules.”

Lagudu tipped his girlfriend Sai Nekkalapudi, 30 with whom he lived, and he also tipped his former roommate and close friend Abhishek Dharmapurikar, 33. Pulagam tipped his brother Chetan Prabhu Pulagam, 31. All seven defendants live in California.

The SEC announced insider trading charges against the seven individuals for allegedly generating more than USD 1 million in collective profits by insider trading ahead of Twilio’s positive first quarter 2020 earnings announcement on May 6, 2020.

“Insider trading is not a game – it’s a federal crime,” said Acting Special Agent in Charge Stone.

According to the SEC’s complaint, Sure, Lagudu and Chotu Pulagam had access to various databases relevant to Twilio’s reporting of revenue.

The SEC’s complaint alleges that despite receiving a company policy that prohibited them from insider trading, Sure, Lagudu and Chotu Pulagam knowingly tipped off, or used the brokerage accounts of Kamujula, Nekkalapudi, Dharmapurikar and Chetan Pulagam to trade Twilio options and stock in advance of its May 6, 2020 earnings announcement while in possession of the confidential information concerning customer usage.

According to the complaint, the scheme generated more than USD 1 million in illegal trading profits.

The SEC complaint said that Sure, Lagudu and Chotu Pulagam “communicated at times in Telugu, a language used frequently in parts of India.”

Kamujula made his initial federal court appearance this morning before U.S. Magistrate Judge Donna M. Ryu and was released on secured bond.  Magistrate Judge Ryu scheduled Kamujula’s next appearance for April 22, 2022, for a status conference before U.S. District Judge Jon S. Tigar.

In a separate civil action, the United States Securities and Exchange Commission filed civil charges against Kamujula, alleging he engaged in insider trading, and against five other individuals, alleging they violated securities laws in connection with trading in Twilio securities.