Bhardwaj et al.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26131 / September 26, 2024

Securities and Exchange Commission v. Bhardwaj et al., No. 1:22-cv-06277 (S.D.N.Y. filed July 25, 2022)

SEC Obtains Final Judgments Against Insider Trading Tippees

On September 24, 2024, the Securities and Exchange Commission obtained final consent judgments against Dhirenkumar Patel and Ramesh Chitor, whom the SEC previously charged with insider trading that collectively generated ill-gotten gains of more than $1.6 million.

The SEC’s complaint, filed on July 25, 2022, alleged that, acting on tips from their friend Amit Bhardwaj, a former Lumentum, Inc. employee, Patel traded in advance of the announcement of Lumentum’s acquisition of Coherent, Inc. on January 19, 2021, and Chitor traded in advance of the announcement of Lumentum’s acquisition of NeoPhotonics Corp. on November 4, 2021.

The case originated from the SEC Enforcement Division’s Market Abuse Unit Analysis and Detection Center, which uses data analysis tools to detect suspicious trading patterns.

Patel and Chitor, each of whom has pleaded guilty in the respective parallel criminal actions United States v. Patel, 22 Cr. 369 (VSB) (S.D.N.Y.) and United States v. Chitor, 22 Cr. 370 (LGS) (S.D.N.Y.), consented to entry of the final judgments in the SEC action permanently enjoining them from violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and barring them from serving as officers or directors of public companies for a period of seven-and-a-half years. The final judgments also order Patel and Chitor to disgorge the illicit gains that they made in their own accounts and in other accounts that they controlled – $423,074 for Patel and $1,244,801 for Chitor – with prejudgment interest thereon, the payment of which was deemed satisfied by forfeiture orders entered in the parallel criminal actions.

The litigation was led by Joshua R. Geller and Lindsay S. Moilanen of the Market Abuse Unit and supervised by Market Abuse Unit Chief Joseph G. Sansone and Preethi Krishnamurthy of the New York Regional Office.