Two East Bay men who admitted taking part in an insider trading scheme in connection with San Jose tech company Lumentum, got off with light jail sentences last week—but a federal judge in New York City stuck them with hefty bills equal to their illegal profits.
Srinivasa Kakkera, 48, of Pleasanton, former head of engineering in artificial intelligence at San Jose-based Adobe, and Abbas Saeedi, 49, a Fremont tax preparer, pleaded guilty to profiting from insider trading schemes related to two pending acquisitions in 2020 and 2021 by Lumentum, a San Jose-based company that makes laser components for Apple mobile devices.
The maximum penalty for insider trading, according to federal sentencing guidelines, is 20 years. Kakkera was sentenced by U.S. District Judge Gregory H. Woods to 18 months in prison for insider trading, and ordered to forfeit $2,453,688. Saeedi was sentenced to five months in prison for insider trading and ordered to pay $691,105.
One of the insider trading events occurred as the men already faced pending insider trading charges. The lucrative schemes involved a Lumentum acquisition of a Pennsylvania firm, Coherent, in 2020 that fell through, and Lumentum’s acquisition of Neophotonics of San Jose that was finalized in 2021, prosecutors said.
Also, according to prosecutors, Kakkera and Saeedi got stock windfalls based on confidential information from a third co-defendant, Amit Bhardwaj, of San Ramon, who worked for Lumentum Holdings Inc.
Bhardwaj earlier pleaded guilty and was previously sentenced to 24 months in prison and fined $975,000.
“Srinivasa Kakkera and Abbas Saeedi traded on valuable material, non-public information about Lumentum’s planned acquisitions, knowing that their friend had stolen this information from his employer, Lumentum,” said U.S. Attorney Damian Williams. “Insider trading is not easy money: if you try to illegally profit from material, non-public information, there’s a price to be paid.”
Lumentum, with a market capitalization of nearly $3.4 billion, makes solid-state lasers used in automobiles, solar cells and semiconductor chips, plus 3D sensing applications used in mobile devices and autonomous driving, including facial recognition sensors in iPhones and iPads.
Wow, and Paul Pelosi doesn’t pay; “… there’s a price to be paid.”
So basically just give the money back and we’ll forget the whole thing happened?