SEC Settles Insider Trading Charges Involving Downstream Tippee of Former Lumentum Executive

ADMINISTRATIVE PROCEEDING
File No. 3-22267

October 17, 2024 – The Securities and Exchange Commission today filed settled charges against Umapathi Kakkera of Monroe, New Jersey for insider trading in advance of a November 4, 2021 announcement that Lumentum Holdings Inc. would acquire NeoPhotonics Corporation.  

According to the SEC’s order, Umapathi Kakkera traded in the securities of NeoPhotonics based on inside information misappropriated by Amit Bhardwaj, then Chief Information Security Officer of Lumentum.  Bhardwaj learned this inside information about Lumentum’s plan to acquire NeoPhotonics through his work at Lumentum.  During the weeks leading up to the merger announcement, in breach of his duty of trust and confidence to Lumentum, Bhardwaj tipped three friends including Srinivasa Kakkera, Umapathi Kakkera’s brother, about the transaction.  Srinivasa Kakkera, in turn, tipped Umapathi Kakkera.  Based on this tip, between October 13, 2021 and November 3, 2021, Umapathi Kakkera purchased NeoPhotonics call option contracts.  Following the merger announcement, NeoPhotonics stock closed at $15.99 per share, which was an increase of approximately 39% from its closing price on the previous day, and Umapathi Kakkera generated more than $200,000 in illicit profits.

The SEC’s order finds that Umapathi Kakkera violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  Without admitting or denying the SEC’s findings, Umapathi Kakkera consented to the issuance of a cease-and-desist order and agreed to pay disgorgement of $206,077.62, prejudgment interest of $30,715.92, and a civil penalty of $206,077.62.

The SEC previously charged and obtained final judgments against Bhardwaj and Srinivasa Kakkera.

The SEC’s investigation was conducted by Joshua R. Geller, John Rymas, and Lindsay S. Moilanen of the Enforcement Division’s Market Abuse Unit, and by Elzbieta Wraga of the New York Regional Office.  This case has been supervised by Market Abuse Unit Chief Joseph G. Sansone.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority.