SEC Charges Arista Networks Founder with Insider Trading

SEC Charges Former Arista Networks Chairman Andy Bechtolsheim with Insider Trading

The Securities and Exchange Commission today announced insider trading charges against Andreas “Andy” Bechtolsheim, the founder and Chief Architect of Silicon Valley-based technology company Arista Networks, Inc. To settle the SEC’s charges, Bechtolsheim agreed to pay a civil penalty of nearly $1 million.

According to the SEC’s complaint, Bechtolsheim misappropriated material nonpublic information regarding the impending acquisition of Acacia Communications, Inc., a manufacturer of highspeed optical interconnect products. The SEC alleges that Bechtolsheim, who was Arista Networks’s chair at the time, learned of Acacia’s impending acquisition on July 8, 2019, through his and Arista Networks’s longstanding relationship with another multinational technology company that was also considering acquiring Acacia and consulted with Bechtolsheim concerning the potential acquisition. Immediately after learning this information, Bechtolsheim allegedly traded Acacia options in the accounts of a close relative and an associate. The next day, July 9, 2019, before the market opened, Acacia and Cisco announced that Cisco had agreed to acquire Acacia for $70 per share. That day, Acacia’s stock price increased by 35.1 percent. According to the SEC’s complaint, Bechtolsheim’s trading generated combined illegal profits of $415,726 in the accounts of his relative and associate.

Nigeria Binance dispute: British-Kenyan executive Nadeem Anjarwalla escapes from custody

A court granted the Economic and Financial Crimes Commission’s request to detain the two executives for 14 days, but their continued detention was not authorised by the court and they were being held “unlawfully”, a source close to the families told the BBC.

They were due to appear again in court early next month.

“The personnel responsible for the custody of the suspect have been arrested, and a thorough investigation is ongoing to unravel the circumstances that led to his escape from lawful detention,” the ONSA said.

Nigerian media are reporting that Mr Anjarwalla asked the guards at a guest house where he was being held to allow him to go to the mosque last Friday but never returned.

The authorities had reportedly confiscated his British passport but the whereabouts of his Kenyan passport were unknown.

Mr Gambaryan remains in custody.

SEC Charges One Current, Three Former Minor League Baseball Players with Insider Trading

The Securities and Exchange Commission filed insider trading charges today against one current and three former minor league baseball players who made about $189,000 in profits from trading in advance of the December 6, 2021 announcement that Jack in the Box Inc. would acquire Del Taco Restaurants, Inc.

According to the SEC’s complaint, filed in federal court in San Diego, a finance employee at Jack in the Box, who is not charged, shared information about the acquisition with his friend and then minor league baseball player, Jordan Qsar. The complaint alleges that the finance employee expected Qsar to keep the information confidential, but instead, Qsar purchased Del Taco call options and tipped others, including his teammate at the time and current minor league player, Grant Witherspoon, former teammate and then minor league player, Austin Bernard, and former teammate and friend, Chase Lambert, all of whom purchased similar call options. The SEC alleges that Qsar made about $56,500, Witherspoon made about $42,800, Bernard made about $64,700, and Lambert made about $25,100 in illegal trading profits.

KuCoin and Its Founders Face Criminal Charges Over Money-Laundering Violations

U.S. prosecutors have filed criminal charges against KuCoin and two of its founders, accusing the global cryptocurrency exchange of violating U.S. anti-money-laundering laws.

The indictment, unsealed Tuesday by prosecutors in Manhattan, charged KuCoin with violating the Bank Secrecy Act and operating an unlicensed money transmitting business, along with related conspiracy charges. Prosecutors also charged two of KuCoin’s founders, Chun Gan and Ke Tang, with related conspiracy charges.

The Crypto Reboot That Wasn’t: Why ‘FTX 2.0’ Floundered

To outside observers, it might seem far-fetched that FTX could be revived after it collapsed with an $8 billion hole in its balance sheet and its top executives were charged with fraud. But the idea of rebooting the exchange in some form—dubbed FTX 2.0—won support among major creditors. Dozens of prospective buyers expressed interest.

As crypto prices rallied late last year, however, the billions of dollars of crypto still under FTX’s control jumped in value, and it became feasible for the company to repay its customers more or less in full. By returning 100 cents on the dollar, the management team steering FTX through bankruptcy could declare its job done, with no need to restart the exchange.

Some creditors say the bankruptcy estate missed an opportunity to create a valuable business from the ashes of FTX, formerly one of the world’s most popular crypto exchanges.

Security Screening Company Hit with AI-Related Securities Suit

Last week, when I wrote about two recent AI-related SEC enforcement actions, I noted that the SEC’s public statements when it announced the enforcement action settlements not only underscored the SEC’s AI-related concerns but also illustrated the kinds of issues that could lead to private securities litigation brought by investors who claim they were misled by companies’ AI-related disclosures. In the latest example showing how company disclosures relating to artificial intelligence can lead to securities litigation, a plaintiff shareholder has filed a securities suit against a security screening company alleging that the company’s public statements about its AI-enabled products and services were misleading. A copy of the March 25, 2024, complaint can be found here.