UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC
Litigation Release No. 17632 / July 25, 2002
SEC v. ARJUN SEKHRI, AMOLAK SEHGAL, PRATIMA RAJAN, FUAD DOW, GORDON W.
COCHRANE, MARTIN L. THIFAULT, ROHINA SHARMA, AND SHARAD KAPOOR,
defendants, and MAHENDAR SEKHRI AND SHARDA SEKHRI, relief defendants,
Civil Action No. 98 Civ. 2320 (S.D.N.Y.) (RPP)
FORMER STOCKBROKER AND HIS WIFE ORDERED TO PAY MORE THAN $1.5 MILLION
FOR INSIDER TRADING
The Securities and Exchange Commission announced that on July 23,
2002, Judge Robert P. Patterson of the Southern District of New York
entered final judgments granting the SEC's motion for summary judgment
against Sharad Kapoor, a former stockbroker in the San Jose,
California office of Merrill Lynch, Pierce, Fenner & Smith, Inc., and
Kapoor's wife, Rohina Sharma. Both Kapoor and his wife now live in
India. The Court found that, between September 1997 and January 1998,
Kapoor and Sharma had engaged in insider trading in the securities of
MCI Communications Corp., Brooks Fiber Properties, Inc., Carson Pirie
Scott & Co., Inc., and Southern New England Telecommunications Corp.,
in advance of five merger and acquisition announcements concerning
these companies.
Based on its findings, the Court permanently enjoined Kapoor from
future violations of Sections 10(b) and 14(e) of the Securities
Exchange Act of 1934 and Rules 10b-5 and 14e-3, and ordered him to pay
disgorgement of $294,418.94, to pay prejudgment interest of
$115,838.21, and to pay civil penalties of $883,256.82. The Court also
entered a permanent injunction against Sharma based on the same
statutory provisions and ordered her to disgorge $58,322.61 in trading
profits, to pay prejudgment interest of $22,946.83, and to pay civil
penalties of $174,967.83.
On April 1, 1998, the SEC commenced an insider trading case against
Arjun Sekhri and others. Sekhri, the source of the inside information,
was an investment banking associate at Salomon Smith Barney, Inc. in
New York City. The SEC later amended its complaint to add defendants
Kapoor and Sharma. The amended complaint alleges that, from September
1997 through January 1998, Sekhri, Kapoor, Sharma, Pratima Rajan,
Amolak Sehgal, Fuad Dow, Gordon W. Cochrane, and Martin L. Thifault
engaged in a highly profitable insider trading scheme by collectively
purchasing call options and/or common stock shortly before six major
corporate announcements. The defendants reaped total profits of
approximately $2.5 million from their illegal securities transactions.
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
defendants, and MAHENDAR SEKHRI AND SHARDA SEKHRI, relief defendants, Civil Action No. 98 Civ.
FORMER STOCKBROKER AND HIS WIFE ORDERED TO PAY MORE THAN $1.5 MILLION FOR INSIDER TRADING
The Securities and Exchange Commission announced that on July 23, 2002, Judge Robert P.
The Court found that, between September 1997 and January 1998, Kapoor and Sharma had engaged
Based on its findings, the Court permanently enjoined Kapoor from future violations of
The Court also entered a permanent injunction against Sharma based on the same statutory
The amended complaint alleges that,
1997 through January 1998, Sekhri, Kapoor, Sharma, Pratima Rajan, Amolak Sehgal, Fuad Dow,
The defendants reaped total profits of approximately $2.5 million from their illegal
According to the SEC's amended complaint, Sekhri tipped Kapoor, whom Sekhri had known since
He was extradited to the United States and pled guilty to criminal charges of insider trading.
Dow, Cochrane, and Thifault have previously settled the SEC's insider trading charges by
The SEC's litigation in this case continues against the remaining defendants.
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