Twilio Engineers Charged With Insider Trading

<p>The Securities and Exchange Commission &lpar;SEC&rpar; announced insider trading charges against three software engineers employed at Twilio&comma; Inc&period;&comma; a San Francisco-based cloud computing communications company&comma; and four family members and friends for allegedly generating more than &dollar;1 million in collective profits by insider trading ahead of the company’s positive first quarter 2020 earnings announcement on May 6&comma; 2020&period;<&sol;p>&NewLine;<p>According to the SEC’s complaint&comma; friends Hari Sure&comma; Lokesh Lagudu and Chotu Pulagam were software engineers at Twilio and had access to various databases relevant to the company’s reporting of revenue&period; As alleged&comma; around March 2020&comma; they learned through the databases that Twilio’s customers had increased their usage of the company’s products and services in response to health measures taken in light of the Covid-19 pandemic&comma; and concluded in a joint chat that Twilio’s stock price would &OpenCurlyDoubleQuote;rise for sure&period;”<&sol;p>&NewLine;<p>The SEC’s complaint alleges that despite receiving a company policy that prohibited them from insider trading&comma; Sure&comma; Lagudu and Chotu Pulagam knowingly tipped off&comma; or used the brokerage accounts of&comma; their family and close friends – Dileep Kamujula&comma; Sai Nekkalapudi&comma; Abhishek Dharmapurikar and Chetan Pulagam – to trade Twilio options and stock in advance of its May 6&comma; 2020 earnings announcement while in possession of the confidential information concerning customer usage&period; According to the complaint&comma; the scheme generated more than &dollar;1 million in illegal trading profits&period;<&sol;p>&NewLine;<p>&&num;8220&semi;We allege that this insider trading ring took advantage of valuable revenue information related to the pandemic at a San Francisco tech company&comma;&&num;8221&semi; said Monique C&period; Winkler&comma; Acting Regional Director of the SEC’s San Francisco Regional Office&period; &&num;8220&semi;We are holding these alleged tippers and tippees accountable for their roles in the scheme&period;&&num;8221&semi;<&sol;p>&NewLine;<p>The SEC’s complaint&comma; filed in the Northern District of California&comma; charges each of the defendants with violating the antifraud provisions of Section 10&lpar;b&rpar; of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder&period;<&sol;p>&NewLine;<p>The U&period;S&period; Attorney’s Office for the Northern District of California also announced criminal charges against Dileep Kamujula&period;<&sol;p>&NewLine;<p>The SEC’s investigation&comma; which is continuing&comma; was conducted by Erin Wilk and Elena Ro of the San Francisco Regional Office&comma; with assistance from Jan Jindra of the SEC’s Division of Economic and Risk Analysis&comma; as well as John Rymas of the Market Abuse Unit’s Analysis and Detection Center&period;  The case was supervised by Jennifer J&period; Lee of the San Francisco Regional Office&period;  The litigation will be led by Susan LaMarca&comma; Ms&period; Wilk and Ms&period; Ro&period;<&sol;p>&NewLine;