SEC v. Hari Prasad Sure, Lokesh Lagudu, Chotu Prabhu Tej Pulagam, et al. — U.S. Securities and Exchange Commission Litigation Release No. 26217, dated January 14, 2025.
The SEC charged seven individuals with insider trading ahead of Twilio's positive first quarter 2020 earnings announcement. The scheme involved software engineers tipping off family and friends, who then traded Twilio options and stock, generating over $1 million in illegal profits. All defendants consented to final judgments including permanent injunctions, disgorgement of profits with interest, and civil penalties.
Imagine some people who work at a company know that the company is going to announce good news soon, but they aren't supposed to tell anyone. These people told their family and friends anyway. Then, the family and friends bought a lot of the company's stock and options before the good news came out. When the good news was announced, the stock price went up, and they sold their shares for a big profit. This is called insider trading, and it's illegal.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
On January 9, 2025, the U.S. District Court for the Northern District of California entered final judgments against Hari Prasad Sure, Lokesh Lagudu, Chotu Prabhu Tej Pulagam, Dileep Kumar Reddy Kamujula, Sai Mounika Nekkalapudi, Abhishek Dharmapurikar, and Chetan Prabhu Sree Karteek Pulagam, resolving the SEC’s insider trading case filed on March 28, 2022. The complaint alleged that software engineers at Twilio Inc. tipped off family members and friends to trade in advance of a positive earnings announcement, generating over $1 million in illegal profits. The defendants consented to permanent injunctive relief, disgorgement of illegal trading profits plus prejudgment interest (from Sure, Kamujula, Nekkalapudi, Dharmapurikar, and Chetan Pulagam), and civil penalties (from Lagudu, Chotu Pulagam, Nekkalapudi, Dharmapurikar, and Chetan Pulagam). Defendants Sure and Kamujula also pled guilty to parallel criminal charges.
Named in this action: Hari Prasad Sure, Lokesh Lagudu, Chotu Prabhu Tej Pulagam, Dileep Kumar Reddy Kamujula, Sai Mounika Nekkalapudi, Abhishek Dharmapurikar.