Former Amazon finance manager and family charged with $1.4m insider trading scheme
The US Securities and Exchange Commission (SEC) has charged a former Amazon finance manager with insider trading.
Security
On Monday, the regulatory watchdog said that from at least January 2016 to July 2018, Laksha Bohra conducted securities trading based on confidential information she had access to as a member of the e-commerce giant's tax department.
The senior manager was involved in preparing and reviewing financial statements included in Amazon's quarterly earnings. Bohra allegedly leveraged this knowledge to play the market in what is known as insider trading in order to reap "illicit profits," according to SEC.
See also: Shopin founder charged by SEC for running $42 million scam cryptocurrency ICO
36-year-old Bohra not only played this game herself but also allegedly tipped off members of her family, including her father-in-law and husband.
"Bohra disregarded quarterly reminders prohibiting her from passing material nonpublic information or recommending the purchase or sale of Amazon securities," SEC's complaint reads.
If an individual has access to pre-release financial information, they may be able to buy or sell stocks and shares based on predictions of what will happen to a company's share prices. For example, profits may send stock prices upward, whereas the disclosure of losses or lawsuits can cause a share price slump.
In total, over the course of roughly two years, the former manager and her family traded in 11 separate brokerage accounts, earning themselves roughly $1.4 million. Bohra's father-in-law reportedly told one of the brokerage firms used that the accounts were treated as a "one family thing."
"Amazon considered [..] pre-release financial information to be confidential, highly sensitive, material, and nonpublic," the US agency says, adding in the complaint that Amazon has previously demonstrated a "zero tolerance" stance on insider trading.
CNET: Universal Health Services slammed by massive cyberattack
Amazon suspended Bohra's employment in October 2018, leading to Bohra's resignation. However, the reason for the termination was not disclosed in the complaint.
Filed in Seattle federal court, the complaint (.PDF) lays out charges against all three family members for violating federal securities laws.
TechRepublic: 5 more things to know about ransomware
According to SEC, all three have agreed to pay back $1,428,094, interest of $118,406, and additional penalties of $1,106,399.
"Employees with access to confidential, potentially market-moving corporate information may not use that information to enrich themselves, their friends, or their families," commented Erin Schneider, Director of the SEC's San Francisco Regional Office.
Amazon declined to comment.
The biggest hacks, data breaches of 2020 (so far)
Previous and related coverage
- SEC settles with two suspects in EDGAR hacking case
- SEC seeks to force Telegram to reveal how $1.7bn ICO funds were spent
- UK court shuts down scam cryptocurrency platform GPay Ltd, £1.5 million in client funds lost
Have a tip? Get in touch securely via WhatsApp | Signal at +447713 025 499, or over at Keybase: charlie0