The United States markets regulator has charged an Indian software engineering manager of insider trading. Sudhakar Reddy Bonthu allegedly made massive gains by using confidential information he received from his employer to trade in the futures market.
The Securities and Exchange Commission made the allegation in a complaint filed in a federal court in Atlanta on Thursday, PTI reported. Bonthu worked for Equifax Inc, a provider of consumer credit scores, from September 2003 to March 2018. The 44-year-old is an Indian citizen and a permanent resident of the Georgia state.
This is the second case filed by the SEC in connection with a data breach involving the company. In September 2017, Equifax announced that the personal details of 14.3 crore US consumers were accessed by hackers between mid-May and July 2017 in one of the largest data breaches in the country.
Days before the announcement, Bonthu was involved with creating a website for consumers impacted by a data breach, and the employer told him the work was for an unnamed potential client. However, he allegedly used the information given to him to conclude that Equifax was the victim of the data breach, the complaint said.
Bonthu used this confidential information to buy Equifax’s “put” options. A put option gives the buyer the right to sell shares at a later date for a price fixed in advance.
When Equifax made the data breach public and its stock declined 14%, Bonthu sold the put options and made over $75,000, nearly 36 times what he had invested, the complaint said.
Bonthu has agreed to settle the civil charge by returning his gains with interest, but the settlement is subject to court approval.
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