Indian software engineering manager charged with insider trading in US
New York: An Indian software engineering manager in the US has been charged with trading on confidential information he received while creating a website for consumers impacted by a data breach.
Sudhakar Reddy Bonthu, 44, is a citizen of India and a permanent resident of the US state of Georgia.
The Securities and Exchange Commission (SEC) said Bonthu committed securities fraud by engaging in illegal insider trading in the securities of information solutions and human resources company Equifax.
Bonthu was an Equifax employee from September 2003 until March 2018. The SEC charged him with insider trading in advance of the company's September 2017 announcement of a massive data breach that exposed Social Security numbers and other personal information of approximately 148 million US customers.
This is the second case the SEC has filed arising from the Equifax data breach. In March, SEC had charged former chief information officer of a US business unit of Equifax Jun Ying with insider trading.
Beginning in September 2013, Bonthu was a Production Development Manager of Software Engineering in Equifax's Global Consumer Solutions business unit. On March 12, 2018, his employment was terminated by Equifax and is currently unemployed.
In a complaint filed in federal court in Atlanta on Thursday, the SEC charged that Bonthu traded on confidential information he received while creating a website for consumers impacted by a data breach.
According to the complaint, Bonthu was told the work was being done for an unnamed potential client, but based on information he received, he concluded that Equifax itself was the victim of the breach.
The SEC alleges that Bonthu violated company policy when he traded on the non-public information by purchasing Equifax put options.
Less than a week later, after Equifax publicly announced the data breach and its stock declined nearly 14 per cent, Bonthu sold the put options and netted more than $75,000, a return of more than 3,500 per cent on his initial investment.
Bonthu was terminated from Equifax in March after refusing to cooperate with an internal investigation into whether he had violated the company's insider trading