A former JPMorgan Chase & Co. analyst has been charged with leaking insider information to his friends, including a tip about Salesforce.com’s $2.5 billion acquisition of Indianapolis-based ExactTarget Inc. in June 2013.
Ashish Aggarwal, 27, of San Francisco, and the two longtime friends, Shahriyar Bolandian, 26, and Kevan Sadigh, 28, surrendered to the FBI on Tuesday to face charges in the $600,000 insider-trading scheme, Los Angeles U.S. Attorney Eileen Decker said in a written statement.
Each defendant was charged with one count of conspiracy to commit securities and tender-offer fraud, 13 counts of securities fraud, 13 counts of tender-offer fraud and three counts of wire fraud. Bolandian also is charged with one count of money laundering.
Aggarwal worked for the J.P. Morgan Securities unit in San Francisco from June 2011 to June 2013, according to the statement.
He’s accused of passing on non-public information about Salesforce.com’s acquisition of ExactTarget and Integrated Device Technology Inc.’s planned acquisition of PLX Technology Inc. in 2012.
“Every professional with access to inside information has a duty and responsibility to protect that information so no one gains an unfair advantage in the securities markets,” Decker said in the statement.
The U.S. Securities and Exchange Commission separately sued Aggarwal and his friends in federal court in Los Angeles.
“Mr. Aggarwal denies the charges against him,” his lawyer, Grant Fondo, said in an email. “He has retained Goodwin Procter to represent him in this matter and intends to vigorously defend himself against these allegations.”
Aggarwal left J.P. Morgan in 2013 after completing a two-year analyst program, said a person briefed on the matter who asked not to be identified discussing personnel. He faces as long as 20 years in prison if convicted of fraud, according to U.S. attorney’s statement.
Prosecutors say Aggarwal shared inside information about the pending acquisitions with Bolandian, who he had known since they had been students at the University of California at Berkeley. Bolandian then allegedly passed it on to Sadigh.
Bolandian and Sadigh then allegedly used the inside information to trade in advance of the public announcements, netting more than $600,000 in profit.
Shares of ExactTarget, also a J.P. Morgan Securities client, jumped 52 percent in June 2013 when it said Salesforce.com was buying the company for $2.5 billion, the SEC said.
Integrated Device Technology retained J.P. Morgan Securities in February 2012 as financial adviser for its intended acquisition of PLX, according to the SEC complaint. PLX shares almost doubled when it said in April that year that Integrated Device Technology would acquire it, the SEC said. The deal never was completed, according to the complaint.
JPMorgan declined to comment on the arrests. Aggarwal has the same first and last names as a JPMorgan executive director in Mumbai who isn’t involved in the case.