SEC Charges Seven California Residents in Insider Trading Ring

Washington, D.C.--(Newsfile Corp. - March 28, 2022) - The Securities and Exchange Commission today announced insider trading charges against three software engineers employed at Twilio, Inc., a San Francisco-based cloud computing communications company, and four family members and friends for allegedly generating more than $1 million in collective profits by insider trading ahead of the companys positive first quarter 2020 earnings announcement on May 6, 2020.

According to the SECs complaint, friends Hari Sure, Lokesh Lagudu and Chotu Pulagam were software engineers at Twilio and had access to various databases relevant to the companys reporting of revenue. As alleged, around March 2020, they learned through the databases that Twilios customers had increased their usage of the companys products and services in response to health measures taken in light of the Covid-19 pandemic, and concluded in a joint chat that Twilios stock price would rise for sure.

The SECs complaint alleges that despite receiving a company policy that prohibited them from insider trading, Sure, Lagudu and Chotu Pulagam knowingly tipped off, or used the brokerage accounts of, their family and close friends Dileep Kamujula, Sai Nekkalapudi, Abhishek Dharmapurikar and Chetan Pulagam to trade Twilio options and stock in advance of its May 6, 2020 earnings announcement while in possession of the confidential information concerning customer usage. According to the complaint, the scheme generated more than $1 million in illegal trading profits.

"We allege that this insider trading ring took advantage of valuable revenue information related to the pandemic at a San Francisco tech company," said Monique C. Winkler, Acting Regional Director of the SECs San Francisco Regional Office. "We are holding these alleged tippers and tippees accountable for their roles in the scheme."

The SECs complaint, filed in the Northern District of California, charges each of the defendants with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

Today, the U.S. Attorneys Office for the Northern District of California announced criminal charges against Dileep Kamujula.

The SECs investigation, which is continuing, was conducted by Erin Wilk and Elena Ro of the San Francisco Regional Office, with assistance from Jan Jindra of the SECs Division of Economic and Risk Analysis, as well as John Rymas of the Market Abuse Units Analysis and Detection Center. The case was supervised by Jennifer J. Lee of the San Francisco Regional Office. The litigation will be led by Susan LaMarca, Ms. Wilk and Ms. Ro.

The SEC appreciates the assistance of the U.S. Attorneys Office for the Northern District of California, the FBI, and the Financial Industry Regulatory Authority (FINRA).

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