Former Amazon CFO and family charged with $1.4 million insider trading scheme
The U.S. Securities and Exchange Commission (SEC) has charged a former Amazon chief financial officer with insider trading.
On Monday, the regulatory watchdog said that from January 2016 to at least July 2018, Laksha Bohra traded securities based on confidential information she had access to as a member of the trading giant’s tax department. electronic.
The senior executive participated in the preparation and review of the financial statements included in Amazon’s quarterly results. Bohra allegedly leveraged this knowledge to play the market in what is known as insider trading to reap “illicit profits”, according to the SEC.
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Bohra, 36, not only played this game herself, but also reportedly warned family members, including her stepfather and husband.
“Bohra ignored quarterly reminders prohibiting it from transmitting material, nonpublic information or recommending the purchase or sale of Amazon securities,” the SEC complaint states.
If a person has access to pre-publication financial information, they may be able to buy or sell stocks and shares based on predictions of what will happen to a company’s stock price. For example, profits can cause stock prices to rise, while the disclosure of losses or lawsuits can cause stock prices to fall.
In total, over a period of about two years, the former manager and her family traded 11 separate brokerage accounts, earning about $1.4 million. Bohra’s father-in-law reportedly told one of the brokerage firms used that the accounts were treated as “a family affair”.
“Amazon considered [..] pre-publication financial information must be confidential, highly sensitive, material and non-public,” the US agency said, adding in the complaint that Amazon had previously taken a “zero tolerance” stance on crimes. insiders.
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Amazon suspended Bohra’s employment in October 2018, resulting in Bohra’s resignation. However, the reason for the dismissal was not disclosed in the complaint.
Filed in federal court in Seattle, the complaint (.PDF) sets out charges against the three family members for violating federal securities laws.
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According to the SEC, all three agreed to pay back $1,428,094, interest of $118,406 and additional penalties of $1,106,399.
“Employees with access to confidential corporate information that could influence the market cannot use that information to enrich themselves, their friends or their family,” commented Erin Schneider, director of the SEC regional office at San Francisco.
Amazon declined to comment.
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