US authorities charge former JP Morgan analyst with insider trading scheme

The Securities and Exchange Commission on Tuesday charged a former J.P. Morgan analyst with insider trading for revealing confidential information regarding company mergers to a friend. The agency alleges he shared it with Bolandian, who in turn tipped off Sadigh.

Between June 2011 and June 2013, Aggarwal was employed by J.P. Morgan Securities, LLC (JPMS) as an investment banking analyst in its San Francisco office.

Aggarwal, 27, and Bolandian, 28, were college friends, while Sadigh, 28, co-owned a Los Angeles clothing company at which Bolandian worked.

Additionally, they were charged with 13 substantive counts of securities fraud, 13 substantive counts of tender offer fraud and three counts of wire fraud.

Federal prosecutors say 27-year-old Ashish Aggarwal was arrested Tuesday along with two Los Angeles friends.

The men used some of the money to cover previous trading losses and to repay debts incurred by Aggarwal and Bolandian, according to prosecutors.

An arraignment in California federal court was scheduled for Tuesday afternoon.

In 2012 and 2013, Aggarwal allegedly obtained material nonpublic information about two separate acquisitions in the technology sector that his team was working on and shared that information with his “close friend” Shahriyar Bolandian.

Mr. Bolandian then used this information to trade using his account, as well as that of his father and sister.

If convicted at trial, each defendant faces up to five years in prison for the conspiracy count and 20 years behind bars for each of the substantive fraud counts, said Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles. “He has retained Goodwin Procter to represent him in this matter and intends to vigorously defend himself against these allegations”, said a statement from his attorney, Grant Fondo.

The scheme netted the three more than $600,000 in illicit profits, the government said.

“Insider trading corrodes the integrity of the markets and undermines confidence among those who choose to trade”.