A former JPMorgan Chase & Co. analyst was charged with giving non-public information about a Salesforce.com Inc. deal to two friends as part of a $600,000 insider-trading scheme.
Ashish Aggarwal, 27, of San Francisco, and the two longtime friends who were also charged surrendered to the FBI Tuesday, Los Angeles U.S. Attorney Eileen Decker said in a statement. They pleaded not guilty and would be released on bond, said Thom Mrozek, a spokesman for Decker.
Aggarwal worked for the J.P. Morgan Securities unit in San Francisco from June 2011 to June 2013, according to the statement. He’s accused of passing on non-public information about Integrated Device Technology Inc.’s planned acquisition of PLX Technology Inc. in 2012 and Salesforce.com’s June 2013 acquisition of ExactTarget Inc.
“Every professional with access to inside information has a duty and responsibility to protect that information so no one gains an unfair advantage in the securities markets,” Decker said in the statement.
The U.S. Securities and Exchange Commission separately sued Aggarwal and his friends in federal court in Los Angeles.
“Mr. Aggarwal denies the charges against him,” his lawyer, Grant Fondo, said in an e-mail. “He has retained Goodwin Procter to represent him in this matter and intends to vigorously defend himself against these allegations.”
Aggarwal left the bank in 2013 after completing a two-year analyst program, said a person briefed on the matter who asked not to be identified discussing personnel.
JPMorgan declined to comment on the arrests. The former analyst has the same first and last names as a JPMorgan executive director in Mumbai who isn’t involved in the case.
Aggarwal faces as long as 20 years in prison if convicted of fraud, according to U.S. attorney’s statement.
He shared the inside information about the pending acquisitions with a friend he knew since they had been students at the University of California at Berkeley, prosecutors said. That friend then allegedly passed it on to another mutual friend.
Integrated Device Technology retained J.P. Morgan Securities in February 2012 as financial adviser for its intended acquisition of PLX, according to the SEC complaint. PLX shares almost doubled when it said in April that year that Integrated Device Technology would acquire it, the SEC said. The deal wasn’t completed, according to the complaint.
Shares of ExactTarget, also a J.P. Morgan Securities client, jumped 52 percent in June 2013 when it said Salesforce.com was buying the company for $2.5 billion, the SEC said.
The case is U.S. v. Aggarwal, 15-cr-00465, U.S. District Court, Central District of California (Los Angeles).