A man of Indian origin, Avaneesh Krishnamoorthy, 42, has pleaded guilty to charges of engaging in a scheme to commit insider trading in which he made thousands of dollars of illegal profits.
Krishnamoorthy pleaded guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million. He is scheduled to be sentenced in November.
According to Joon Kim, the Acting U.S. Attorney for the Southern District of New York, Krishnamoorthy, a vice president and risk management specialist for a Manhattan, New York-based investment bank, made over $78,000 by trading in the stock and options of three publicly traded companies based on material nonpublic information he misappropriated from the investment bank and its parent company.
“As he admitted in federal court, Avaneesh Krishnamoorthy abused his position as an investment bank executive to get nonpublic information about several companies and then trade on it,” Kim is quoted saying in a press release.
According to court documents, as a vice president and risk management specialist, Krishnamoorthy was given access to material, non-public information concerning mergers and acquisitions in which the investment bank was potentially going to be retained.
In November 2016, the investment bank was contacted about financing the acquisition by a private equity fund of technology company Neustar whose shares are traded on the New York Stock Exchange.
Krishnamoorthy did receive multiple emails regarding the investment bank’s potential involvement in the transaction and used that material to acquire Neustar stock and options, eventually purchasing numerous Neustar call options and hundreds of shares of the stock before the public announcement of the transaction and causing the Neustar stock to increase by approximately 20 percent.
He did not reveal these trades or the existence of the underlying brokerage accounts to the company and used material nonpublic information that he received from the company to make profitable trades in the securities of two other companies.