An Indian-American man, Janardhan Nellore, pleaded guilty Dec. 18, 2019, to conspiracy to commit securities fraud. The guilty plea was accepted by U.S. District Judge Lucy H. Koh.
In pleading guilty, Nellore admitted to participating in an insider trading scheme by trading on material, nonpublic, inside information that he learned through his employment at Palo Alto Networks, Inc. (“PANW”), where he worked as an IT administrator, the U.S. Attorney for the Northern District of California announced in a press release.
Nellore admitted that he obtained confidential information about PANW’s quarterly financial performance and traded on that information before PANW disclosed its financial results to the public.
He admitted to placing illegal inside trades in the brokerage accounts of other people for his own benefit and for the benefit of the account holders around PANW’s quarterly earnings announcements.
Nellore also admitted that he tipped PANW’s nonpublic information to other people who then traded PANW securities around the company’s earnings announcements using this inside information.
He also admitted that the members of the conspiracy made more than $7 million as a result of their illegal insider trading.
Nellore was indicted by a federal Grand Jury on December 12, 2019, and arraigned on December 17, 2019. He was charged with one count of conspiracy to commit securities fraud, six counts of securities fraud and aiding and abetting, and three counts of aggravated identity theft.
Under the plea agreement, Nellore pled guilty to Count One, conspiracy to commit securities fraud.
Nellore is currently in the custody of the United States Marshal. His next appearance is scheduled for February 26, 2020, before Judge Koh for a status conference on sentencing.
The maximum penalty for the conspiracy to commit fraud is 25 years and a fine of $250,000, plus restitution and forfeiture, if appropriate.