NRI Avaneesh Krishnamoorthy-VP of Investment Bank Nomura, charged with insider trading worth $48,000

New York, April 24, 2017
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NRI Avaneesh Krishnamoorthy, an investment banking vice president and risk management specialist was charged on April 24, 2017, with insider trading in Neustar Inc before the advertising technology company agreed to be acquired by a private equity firm.

Avaneesh Krishnamoorthy, living in West New York, New Jersey, made about $48,000 trading Neustar stock and options in a brokerage account held by him and his wife, after learning that Golden Gate Capital was in talks to buy the company, court papers show.

• On Nov. 23, 2016, Nomura circulates a document introducing Golden Gate’s plan to buy NeuStar.

• On Nov. 25, 2016, a brokerage account which was opened in 2015 in Krishnamoorthy’s wife’s name,  adds 800 shares of NeuStar at around $25 apiece, as well as nine call options with a strike price of $25, expiring Dec 16.

• On Nov. 28, 2016, Nomura circulates a memo that confirms Golden Gate will buy NeuStar at $30.50 a share, representing a 22% premium.

• In  the next two weeks, his Wife’s account was added more shares and call options, as does an IRA Krishnamoorthy opened – in his own name – the previous year.

• On Dec. 14, 2016, NeuStar announces acquisition and Stock shoots up 21% percent. Krishnamoorthy subsequently sells a bunch of call options and stock, earning around $48,000.

He was with insider trading on confidential information he learned in advance of a private equity firm's acquisition of a publicly-traded technology company.

The SEC alleges that Avaneesh Krishnamoorthy learned that Golden Gate Capital planned to acquire Neustar Inc., and he then began trading in Neustar securities. The trading took place in two brokerage accounts that Krishnamoorthy allegedly kept hidden from his employer, which had been approached by Golden Gate Capital to finance the transaction. According to the SEC's complaint, Krishnamoorthy made approximately $48,000 in illicit profits.

In a parallel action, the U.S. Attorney's Office for the Southern District of New York today filed criminal charges against Krishnamoorthy.

The SEC is seeking an emergency court order to freeze the assets in the brokerage accounts belonging to Krishnamoorthy and his wife, who has been named as a relief defendant in the SEC's complaint for purposes of recovering allegedly ill-gotten gains in the account in her name.

The SEC's investigation is being conducted by Alison R. Levine, Preethi Krishnamurthy, Neil Hendelman, and Thomas P. Smith Jr. The litigation will be led by Ms. Krishnamurthy and Ms. Levine.

The case is being supervised by Sanjay Wadhwa.

• The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority

• Sanjay Wadhwa Named Associate Regional Director for Enforcement in SEC New York Regional Office in 2011. "Sanjay is a very special blend: experienced securities lawyer, meticulous investigator, gracious colleague, and nurturing leader," said George S. Canellos, Director of the SEC's New York Regional Office. "His unique personal qualities and total dedication to the mission of the SEC make him ideally suited for senior leadership in the enforcement program."

Nomura is an Asia-headquartered global investment bank with an integrated network spanning over 30 countries. By connecting markets East & West, Nomura service the needs of individuals, institutions, corporates and governments through our three business divisions: Retail, Asset Management, and Wholesale (Global Markets and Investment Banking). Driven by the insights of some 28,000 people worldwide, we put our clients at the center of everything we do, delivering unparalleled access to, from and within Asia. Nomura sets itself apart from other Asia Private Banks with its Retail Division, including Wealth Management, responsible for AUM of USD 1 trillion.