San Francisco Man Charged with Insider Trading

By PAIGE AUSTIN (Patch Staff)

An analyst with J.P. Morgan Securities and two longtime friends were arrested this morning after being indicted for an alleged insider trading scheme that netted more than $600,000. The trio allegedly used the bank’s inside information about pending mergers and acquisitions for illicit stock trades, the U.S. Department of Justice alleges.

Ashish Aggarwal, 27, of San Francisco; Shahriyar Bolandian, 26, of the Palms District in Los Angeles; and Kevan Sadigh, 28, of Encino, are named in an indictment that was unsealed this morning.

Each man is charged with one count of conspiracy to commit securities and tender offer fraud, 13 counts of securities fraud, 13 counts of tender offer fraud and three counts of wire fraud. Bolandian also is charged with one count of money laundering.

All three men surrendered to the FBI this morning, and are scheduled to be arraigned this afternoon in United States District Court in downtown Los Angeles.

Between June 2011 and June 2013, Aggarwal worked for J.P. Morgan Securities, LLC as an investment analyst in its San Francisco office. According to the indictment, Aggarwal allegedly obtained material, non-public information about upcoming mergers and acquisitions involving publicly-traded companies. He allegedly disclosed inside information to his friend Bolandian, who shared it with Sadigh.

Bolandian and Sadigh allegedly used the inside information to trade in advance of the public announcements of Integrated Device Technology Inc.’s April 2012 planned acquisition of PLX Technology Inc., and Salesforce.com Inc.’s June 2013 acquisition of ExactTarget Inc., according to prosecutors.

The scheme allegedly netted them more than $600,000, which the trio allegedly used to, among other things, cover previous trading losses and to repay debts.

“After being confronted by special agents with the FBI about their trading in early 2015, Bolandian and Sadigh provided false explanations of the basis of their trading decisions,” according to the indictment.

“Every professional with access to inside information has a duty and responsibility to protect that information so no one gains an unfair advantage in the securities markets,” said United States Attorney Eileen M. Decker. “Insider trading corrodes the integrity of the markets and undermines confidence among those who choose to trade. We will bring to justice anyone who illegally uses or shares confidential business information that can be used to manipulate the system.”

“Today’s arrests make it clear that greed is not good, and also illustrate the FBI’s commitment to identifying and rooting out corrupt trading practices,” added David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office.

A representative from the law offices of Grant Fondo of Goodwin Procter released a statement on behalf of Aggarwal.

“Mr. Aggarwal denies the charges against him. He has retained Goodwin Procter to represent him in this matter and intends to vigorously defend himself against these allegations.”

If they are convicted, the three would face up to five years in federal prison for the conspiracy count and 20 years for each of the fraud counts. Additionally, Bolandian could be sentenced to as much as 10 years in prison if he is convicted of the money laundering offense.

Photo via Shutterstock