Ex-PwC auditor faces £27,000 fine over insider trading
A former PwC auditor has paid $36,000 (£26,773) to settle charges from the US Securities and Exchange Commission (SEC) that he tipped his relative with inside information about a client on the verge of a merger
15 Sep 2017
The SEC complaint against Mayank Gupta alleges that, through his audit work at PwC he learned that Californian-based Cavium was making imminent preparations to acquire QLogic, also based in the state.
The regulator claimed that before the deal was announced to the public, Gupta called his cousin-in-law Pushpendra Agrawal, and told him that Cavium was going to acquire QLogic and that QLogic was a ‘sure thing.’
Upon arriving at work, Agrawal bought 200 QLogic call options, based on Gupta's tip. During his lunch break, Agrawal bought an additional 50 QLogic call options, again based on Gupta's tip. After QLogic announced that it would be acquired by Cavium through a tender offer, QLogic's stock rose by more than 9%, and Agrawal profited by more than $23,785 from the illegal trades.
Without admitting or denying the allegations in the SEC's complaint, Gupta and Agrawal have agreed to pay a civil penalty of $23,785 in disgorgement plus $964 in interest and a civil penalty of $11,892, for a total of $36,641. The amount of Agrawal's penalty reflects his cooperation with the SEC in its investigation. Gupta and Agrawal also agreed to the entry of permanent injunctions against future violations of the charged provisions of the federal securities laws. The settlement is pending court approval.
Report by Pat Sweet