The US Securities and Exchange Commission (SEC) announced charges on Monday against a former Amazon.com, Inc. finance manager along with two of her family members, alleging a multi-year insider trading scheme “in advance of Amazon earnings announcements between January 2016 and July 2018.”
The SEC’s complaint, filed in the district court in Seattle, asserts that Laksha Bohra “misused highly confidential Amazon financial information for her and her family’s personal gain.” Bohra, a former senior manager in Amazon’s tax department, allegedly passed that information on to her husband. The complaint alleges that her husband and his father traded Amazon stock and options “on the basis of the material nonpublic information that Bohra provided … in 11 separate accounts maintained by different members of the Bohra family.” The SEC claims the family together made a profit of approximately $1.4 million.
The complaint further alleges that “Amazon repeatedly informed Bohra that she owed an obligation to maintain the confidentiality of Amazon’s financial information and to refrain from trading in Amazon securities based on material nonpublic information.” The SEC maintains that Bohra ignored quarterly reminder emails from the Amazon Legal Department which prohibited corporate employees from giving confidential information to others—including family and friends.
The SEC’s complaint charges the Bohras with “violating antifraud provisions of the federal securities laws.” Its press release states that “all three Bohras have consented to the entry of final judgments permanently enjoining them from further violations.” They have also agreed to pay back the stock gains as well as over $1 million in fines and interest.
The Prayer sought in the complaint stated as under:
“WHEREFORE, the SEC respectfully requests that this Court: I. Permanently restrain and enjoin the Bohra Defendants from, directly or indirectly, violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; II. Order the Bohra Defendants to disgorge all ill-gotten gains or unjust enrichment derived from the activities set forth in this Complaint, together with prejudgment interest thereon; III. Order the Bohra Defendants to pay civil monetary penalties under Section 21A of the Exchange Act [15 U.S.C. § 78u-1]; IV. Retain jurisdiction of this action in accordance with the principles of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered, or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court; and V. Grant such other and further relief as this Court may deem just, equitable, and necessary.”
On top of the SEC’s charges, the US Attorney’s Office for the Western District of Washington filed criminal charges against Bohra’s husband, Vicky Bohra.
See the complaint filed.