HomeMarket News Uncovering Financial Fraud: Recent Cases of Insider Trading and Illegal Operations Uncovering Financial...

Uncovering Financial Fraud: Recent Cases of Insider Trading and Illegal Operations Uncovering Financial Fraud: Recent Cases of Insider Trading and Illegal Operations

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Money Laundering Bitcoin



Andreas Bechtolsheim, an imperative figure at Silicon Valley’s esteemed Arista Networks Inc ANET, made headlines this week for a settlement regarding insider trading, agreeing to pay a substantial civil penalty amounting to nearly $1 million.


The notorious U.S. Securities and Exchange Commission (SEC) leveled accusations against Bechtolsheim, citing violation of insider trading regulations as he misused confidential information about the acquisition of Acacia Communications.


Serving as the chair of Arista, Bechtolsheim was informed about Acacia’s imminent takeover on July 8, 2019.


It was suspected that a rival bidder may have consulted Bechtolsheim, who swiftly took advantage of the information by trading Acacia options through accounts held by a close relative and an associate.


The following day, the acquisition news broke, revealing that Cisco Systems Inc CSCO was to purchase Acacia at $70 per share, causing a 35% surge in Acacia’s stock price.


The SEC alleged that Bechtolsheim’s actions led to illegal gains of $415,726 through the accounts of his associates.


In a bid to settle the matter, Bechtolsheim, neither admitting nor refuting the accusations, consented to a permanent injunction preventing him from holding office as an officer or director of a public company for five years, alongside a hefty civil monetary penalty of $923,740.


Also Read: Sam Bankman-Fried Sentenced To 25 Years: Judge Points To Ambition, Political Manipulation


Professional Athletes Implicated in Del Taco Insider Trading Scheme


Recent revelations indicate that the SEC has charged one current and three former minor league baseball players with insider trading offenses.


According to the SEC, an employee at Jack in the Box Inc JACK shared confidential details with his acquaintance, former minor league player Jordan Qsar, regarding the impending acquisition of Del Taco Restaurants.


Qsar is accused of purchasing Del Taco call options and informing his fellow teammates Grant Witherspoon, Austin Bernard, and Chase Lambert, who subsequently engaged in similar call option dealings.


As per the SEC, Qsar profited around $56,500 illegally, while Witherspoon, Bernard, and Lambert made $42,800, $64,700, and $25,100, respectively.


The regulatory agency is seeking permanent injunctions, recovery of profits, interest, and civil penalties against all four individuals involved.


KuCoin Faces Allegations of Operating an Unlawful Cryptocurrency Exchange


In a significant development, the Commodity Futures trading Commission (CFTC) initiated a civil action against the four entities collectively responsible for operating the Kucoin crypto exchange, accusing them of multiple violations of the Commodity Exchange Act.


The CFTC charged Mek Global Ltd, PhoenixFin PTE Ltd, Flashdot Ltd, and Peken Global Ltd with engaging in illicit off-exchange trading of commodity futures and derivatives without obtaining mandatory trading registrations from the CFTC or implementing essential know-your-customer procedures.


Ian McGinley, the enforcement director at the CFTC, condemned these actions, stating, β€œFor too long, certain offshore crypto exchanges have followed a familiar playbook of offering derivative products while erroneously claiming U.S. residents cannot trade on their platforms, which is far from the truth. Anyone in the U.S. with basic technology can trade without providing necessary identifying information.”


Moreover, Kucoin is facing allegations from the New York U.S. Attorney’s Office related to violations of the Bank Secrecy Act and unauthorized operations.


Now Read: Want To Invest In SpaceX? An IPO Looks Inevitable, But In The Meantime, Go Private Equity


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