SEC Charges Two Houston-Area Men with Insider Trading
July 23, 2019
File No. 3-19261
July 23, 2019 - The Securities and Exchange Commission today announced settled charges against Balaji Sundarraj of Sugar Land, Texas and David O'Brien of Houston, Texas for insider trading in the stock of Opower, Inc. in advance of the May 2, 2016 announcement that Opower had agreed to be acquired by Oracle Corporation as part of a tender offer.
According to the SEC's order, in late April 2016, Sundarraj learned of material nonpublic information about Opower's imminent acquisition by Oracle by overhearing a confidential telephone conversation by his brother-in-law, an attorney who was working on due diligence for one of the parties. Sundarraj then tipped his friend, O'Brien, and each of them purchased Opower stock before the public announcement. The order finds that Opower's stock price rose by nearly 30 percent following the public announcement, and that Sundarraj and O'Brien sold their Opower stock that same day for trading profits of $12,050 and $22,900, respectively.
The order finds that respondents violated the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Without admitting or denying the findings in the SEC's order, the respondents each consented to the entry of a cease-and-desist order. Additionally, Sundarraj consented to disgorgement and prejudgment interest totaling $13,700, and to a civil penalty of $34,950. O'Brien consented to disgorgement and prejudgment interest totaling $26,037, and to a civil penalty of $22,900.
The SEC's investigation was conducted by Brent Smyth and supervised by Steven Buchholz and Erin Schneider of the San Francisco Regional Office.