Indian American arrested, charged with insider trading in Manhattan

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 28, 2016. REUTERS/Andrew Kelly/Files

An Indian-origin man who works as a vice president and risk management specialist for a Manhattan-based investment bank was arrested April 24, and charged with insider trading.

Avaneesh Krishnamoorthy, allegedly made approximately $48,000 in connection with stock and options trading based on material non-public information about a private equity fund’s potential acquisition of a publicly traded company, according to a press release from the office of the U.S. Attorney for the Southern District of New York.

Krishnamoorthy was presented today in Manhattan federal court before United States Magistrate Judge Kevin Nathaniel Fox. He is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense.

According to his LinkedIn profile, Krishnamoorthy is a 1993 graduate of the National Institute of Technology in Karnataka. He earned his MBA at Carnegie Mellon University’s Tepper School of Business. Since 2011, he worked as a market risk manager at Nomura Securities. Prior to that he was a vice president at Morgan Stanley from 2007-2011.

“Avaneesh Krishnamoorthy is charged with violating his duty to his company and trading on insider information.  He allegedly exploited his access to information about a pending acquisition to purchase stock and options, making tens of thousands of dollars in illegal profit for himself,” said U.S. Attorney Joon Kim.

According to the papers filed in court, Krishnamoorthy, as a vice president and risk management specialist, had access to material nonpublic information concerning mergers and acquisitions for which the Investment Bank might potentially provide financing.

In November 2016, the U.S. Attorney’s office says, a private equity fund contacted the Investment Bank concerning financing for the Fund’s acquisition of Neustar, Inc., a publicly traded company whose shares trade on the New York Stock Exchange.

Around that time, Krishnamoorthy received multiple emails regarding the Investment Bank’s potential involvement in the transaction, including emails that summarized the details of the deal, prosecutors say. They accuse Krishnamoorthy of violating company policy and using the information to acquire Neustar stock and options, in his own name and that of his wife. They also accuse Krishnamoorthy of not revealing these trades or the existence of these brokerage accounts to the Company.

The public announcement of the Fund’s acquisition of Neustar on December 14, 2016, resulted in an approximately 20 percent increase in the value of Neustar stock in the hours following the announcement, resulting in a corresponding increase in the value of the call options and equity stock held by Krishnamoorthy and his spouse, prosecutors maintain.




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