On Tuesday, two UC Berkeley alumni, along with an acquaintance, were arraigned on charges of participating in an insider trading scheme resulting in $600,000 of illicit profits.
Ashish Aggarwal, 27; Shahriyar Bolandian, 26; and Kevan Sadigh, a 28-year-old UC Irvine alumnus and colleague of Bolandian’s, all surrendered to the FBI. Each was individually arraigned with 13 counts of securities fraud and three counts of wire fraud, among others, stemming from Aggarwal’s position as an analyst at JP Morgan Securities.
In 2010, Aggarwal graduated from UC Berkeley with a bachelor’s degree in economics, according to the Cal Alumni Association. He worked as a technology, media and telecommunications analyst at JP Morgan in San Francisco from June 2011 until June 2013.
Bolandian graduated from UC Berkeley in the same year with a dual degree in molecular and cell biology and psychology, according to the Cal Alumni Association. He became close friends with Aggarwal in college, according to a complaint filed by the Securities and Exchange Commission.
In 2012 and 2013, Bolandian worked for Sadigh’s self-founded company, Greek Life Threads, according to the documents, and Aggarwal and Bolandian frequently communicated over email regarding Aggarwal’s work at JP Morgan.
Sadigh was aware that Bolandian and Aggarwal met while studying at UC Berkeley and that Aggarwal worked at an investment banking company in San Francisco, according to court documents. The documents also said that Bolandian and Sadigh were active traders, making “hundreds of securities-related orders” from February 2012 to June 2013, and that Aggarwal gained information regarding the companies involved because of his position as an analyst at JP Morgan.
Before the April 2012 public announcement of a merger between Integrated Device Technology Inc. and PLX Technology Inc. — both JP Morgan clients — Aggarwal obtained nonpublic material about this impending transaction and allegedly informed Bolandian, court documents indicate.
Bolandian and Sadigh then traded in PLXT stocks in April, two weeks before the public announcement, according to court-obtained brokerage accounts. Additionally, Bolandian and Sadigh both traded in stocks for ExactTarget in May 2013, less than a month before the public announcement of Salesforce.com’s acquisition of ExactTarget.
Bolandian, Sadigh and Aggarwal allegedly obtained large monetary gains by using the misappropriated information to make unlawful securities trades, the commission alleged.
Aggarwal had the responsibility of keeping the information he had learned in the course of his employment confidential, avoiding sharing nonpublic material with outsiders. During his employment at JP Morgan, Aggarwal was subject to the company’s code of conduct, prohibiting him from disclosing private information unless authorized to do so.
“Aggarwal denies the charges against him…and intends to vigorously defend himself against these allegations,” said Aggarwal’s lawyer Grant Fondo in email.
JP Morgan could not be reached for immediate comment.