On Monday, the Securities and Exchange Commission charged three software engineers from cloud software vendor Twilio and some of their friends and family with the insider trading scheme.
From March to May 2020, as cloud tools become available due to the proliferation of remote work, Twilio engineers Lokesh Lagudu, Chotu Pulagam, and Hari Sure will access financial information in the company’s database for private chat. I shared that information with other users through the group. Twilio closed the transaction before announcing its first-quarter results in May 2020, according to a complaint filed in the US District Court for Northern California.
Twilio’s results have skyrocketed past estimates and stock prices have skyrocketed. The scheme has generated more than $ 1 million in profits for the group, the SEC said.
This is a topic that is getting more and more attention from regulators, and the SEC is reported to have proposed new rules surrounding the sale of executive shares and investigated the sale by Tesla’s board member Kimbal Musk. And sell the stock.
The three Twilio engineers belong to the team responsible for sending customer invoices, each signing an agreement not to provide private information in a way that would lead to illegal transactions. Twilio’s software helps businesses communicate with their customers.
Indeed, he passed information about the data to his friend Dileep Kamjura, Pragham gave details to his brother Chetan Pragham, and Ragdu provided information to his girlfriend Sai Nekarapudi and his friend Abishek Dharmaprika.
After receiving the information, Sure wired about $ 10,000 to Kamujula, and Kamujula purchased Twilio’s call option. Meanwhile, Nekkalapudi and Chetan Pulagam have sought permission to trade options from a securities account that has not been used for years.
“The insider trading ring claims to have used valuable revenue information related to pandemics at San Francisco’s tech companies,” said Monique C. Winkler, regional director of the SEC’s San Francisco Regional Office. Said in the release. These alleged tippers and tippies are responsible for their role in the plan. “
Separately, a US law firm in Northern California has filed criminal charges against Camjura, accusing him of securities fraud related to Camjura’s transactions. The SEC accusations are civil in nature and primarily demand fines.
A Twilio spokesperson was unable to confirm the employment status of Lagudu, Pulagam, or Sure.
“The company is aware of the investigations filed today by the US law firm and the Securities and Exchange Commission and the allegations raised today. The company is fully cooperating with both agencies,” a spokeswoman said. Told.
Twilio engineers allegedly communicated in a private chat group and exchanged messages in Telugu, the main spoken language in southern India. Based on customer data, he said that within the group, the results would ensure that inventory would increase.
“Ragdu” checked “the domestic revenue database on a chat channel, determining that” SMS and other costs increased this month, “and also complained that” email revenues also increased. ”
Lagudu told a colleague that he was sending three times as many messages as he had previously sent, pointing out that one customer went from $ tens of thousands last month to nearly $ 2 million in March. Did.
Two days before Twilio announced its first-quarter results, Sure said in a chat group that stock prices seemed to jump from about $ 110 at the time to $ 150, and Chotu Pulagam replied “Miillionaireeeeee,” according to complaints. ..
Watch: Final transaction: CVS, Twilio, SM Energy, etc.