The SEC Charges Twilio Engineers for Insider Trading

Three engineers at communications tools company Twilio have been charged by the Securities and Exchange Commission with insider trading during the early days of the Covid-19 pandemic.

The engineers allegedly had access to details on customer use and shared confidential information with friends and family members.

The SEC charged the three employees and four others with insider trading. The group generated over $1 million in profits, the SEC said.

Between March and May 2020, as cloud tools were gaining use due to the surge in remote work, Twilio engineers Lokesh Lagudu, Chotu Pulagam and Hari Sure accessed financial information from the company’s databases.

In a private chat group, they shared that information with others, who then executed trades before Twilio announced first-quarter results in May 2020, according to the complaint filed in the U.S. District Court for California’s Northern District.

Twilio’s results soared past estimates and the stock skyrocketed. Due to the scheme, the group generated over $1 million in profits, the SEC said.

The three Twilio engineers sat on a team responsible for sending customers invoices, and each had signed an agreement saying they would not provide non-public information in a manner that could end in unlawful trading.

“We allege that this insider trading ring took advantage of valuable revenue information related to the pandemic at a San Francisco tech company,” said Monique C. Winkler, acting regional director of the SEC’s San Francisco Regional Office, in a press release. “We are holding these alleged tippers and tippees accountable for their roles in the scheme.”

Separately, the U.S. Attorney’s Office for California’s Northern District filed criminal charges against Kamujula, accusing him of securities fraud in association with his trading. The SEC charges are civil in nature and call primarily for monetary penalties.

“The company is aware of the investigations being conducted by the U.S. Attorney’s Office and the Securities and Exchange Commission and the charges that were filed today,” the spokesperson said. “The company has been cooperating fully with both agencies.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.