Three NRIs charged in US insider trading scheme

Khan used the confidential information to illegally trade on more than 40 occasions ahead of the company’s public release of financial results. The SEC’s complaint charges Khan, Chaganlal, Mendonsa, and Akbari with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctive relief, disgorgement of illicit profits plus interest, financial penalties and an officer-and-director bar against Chaganlal.

Besides trading in his own brokerage account, Khan traded in his brother-in-law’s account as well as an account belonging to another acquaintance. Khan also tipped his work colleagues Ranjan Mendonsa and Ammar Akbari so they too could trade in Ross stock options based on non-public information. The insider trading resulted in collective profits of more than $12 million, the SEC said. 

It further alleged that at the outset of the scheme, Chaganlal gave $17,000 to Khan for the purpose of insider trading in Ross securities using the brother-in-law’s account.