SEC Charges Former Arista Networks Chairman Andy Bechtolsheim with Insider Trading
summary
Arista Networks founder Andreas Bechtolsheim settled SEC insider trading charges by paying $923,740 and accepting a five-year officer and director bar.
paragraph
Andreas Bechtolsheim faced SEC charges for misappropriating nonpublic information regarding Cisco’s acquisition of Acacia Communications. His trades in Acacia options through a relative and an associate generated $415,726 in illegal profits. To settle the matter, he agreed to a $923,740 civil penalty and a five-year bar from serving as a public company officer or director.
narrative
The SEC charged Arista Networks founder Andreas Bechtolsheim with insider trading for misappropriating material nonpublic information about Cisco’s acquisition of Acacia Communications. Bechtolsheim learned of the deal through a business contact and immediately traded Acacia options using the accounts of a relative and an associate. These trades resulted in combined illegal profits of $415,726 following a 35.1 percent surge in Acacia’s stock price. To resolve the charges in the U.S. District Court for the Northern District of California, Bechtolsheim agreed to a $923,740 civil penalty. He also accepted a five-year bar from serving as an officer or director of a public company. The settlement, which does not require admitting or denying allegations, remains subject to court approval.
Classified insider-trading(confidence 99%). EDGAR detection: forms 4/3/5/144· recall 81% / precision 19%. detection rule →
Parties
andreas bechtolsheimjoseph g. sansonesec investigationSecurities and Exchange Commissionsec will continue to pursue and prosecute misconduct by trusted insiders
Keywords
secbechtolsheimarista networksacaciaandy bechtolsheiminsider tradingmarket abuseabuse unitaristanetworkstradingcompanyacquisitionformer aristanetworks chairman
Extracted insights
Dollar amounts 3
- $1.00M $1 million $1M–$10M
- $924K $923,740 $100K–$1M
- $416K $415,726 $100K–$1M
Entities 6
- person andreas bechtolsheim
- scheme_term insider trading charges against andreas bechtolsheim
- person joseph g. sansone
- agency sec investigation
- agency Securities and Exchange Commission
- agency sec will continue to pursue and prosecute misconduct by trusted insiders
Triples 10
- Securities And Exchange Commission announced charges insider trading charges against Andreas Bechtolsheim
- Andreas Bechtolsheim agreed to pay civil penalty of nearly $1 million
- Andreas Bechtolsheim misappropriated information material nonpublic information about acquisition of Acacia Communications
- Andreas Bechtolsheim learned Acacia’s impending acquisition on July 8 2019
- Andreas Bechtolsheim traded options Acacia options in accounts of a close relative and an associate
- Acacia And Cisco announced acquisition Cisco agreed to acquire Acacia for $70 per share
- Bechtolsheim’s trading generated profits illegal profits of $415,726 in the accounts of his relative and associate
- Joseph G. Sansone said SEC will continue to pursue and prosecute misconduct by trusted insiders
- Andreas Bechtolsheim settled charges barred from serving as officer or director for five years and pay $923,740 civil penalty
- SEC Investigation conducted by John P. Mogg with assistance from Patrick McCluskey, John S. Rymas, and Ainsley Kerr
Extracted body text (2,582c)
The Securities and Exchange Commission today announced insider trading charges against Andreas “Andy” Bechtolsheim, the founder and Chief Architect of Silicon Valley-based technology company Arista Networks, Inc. To settle the SEC’s charges, Bechtolsheim agreed to pay a civil penalty of nearly $1 million. According to the SEC’s complaint, Bechtolsheim misappropriated material nonpublic information regarding the impending acquisition of Acacia Communications, Inc., a manufacturer of highspeed optical interconnect products. The SEC alleges that Bechtolsheim, who was Arista Networks’s chair at the time, learned of Acacia’s impending acquisition on July 8, 2019, through his and Arista Networks’s longstanding relationship with another multinational technology company that was also considering acquiring Acacia and consulted with Bechtolsheim concerning the potential acquisition. Immediately after learning this information, Bechtolsheim allegedly traded Acacia options in the accounts of a close relative and an associate. The next day, July 9, 2019, before the market opened, Acacia and Cisco announced that Cisco had agreed to acquire Acacia for $70 per share. That day, Acacia’s stock price increased by 35.1 percent. According to the SEC’s complaint, Bechtolsheim’s trading generated combined illegal profits of $415,726 in the accounts of his relative and associate. “We allege that Bechtolsheim, while serving as the chairman of a publicly traded company, abused the trust of a longtime business contact who had shared highly sensitive information about an imminent corporate acquisition,” said Joseph G. Sansone, Chief of the SEC’s Market Abuse Unit. “We will continue to pursue and prosecute misconduct by trusted insiders at all levels of the corporate hierarchy.” Without admitting or denying the allegations in the SEC’s complaint, which was filed in the U.S. District Court for the Northern District of California, Bechtolsheim settled the SEC’s charges by agreeing to be barred from serving as an officer or director of a public company for five years and to pay a civil monetary penalty of $923,740. The settlement is subject to court approval. The SEC’s investigation was conducted by John P. Mogg of the Division of Enforcement’s Market Abuse Unit in the San Francisco Regional Office with assistance from Patrick McCluskey, John S. Rymas, and Ainsley Kerr of the Market Abuse Unit’s Analysis and Detection Center. The matter was supervised by Rahul Kolhatkar and Mr. Sansone. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
OCR text (2,582c · html-text · 99% conf)
The Securities and Exchange Commission today announced insider trading charges against Andreas “Andy” Bechtolsheim, the founder and Chief Architect of Silicon Valley-based technology company Arista Networks, Inc. To settle the SEC’s charges, Bechtolsheim agreed to pay a civil penalty of nearly $1 million. According to the SEC’s complaint, Bechtolsheim misappropriated material nonpublic information regarding the impending acquisition of Acacia Communications, Inc., a manufacturer of highspeed optical interconnect products. The SEC alleges that Bechtolsheim, who was Arista Networks’s chair at the time, learned of Acacia’s impending acquisition on July 8, 2019, through his and Arista Networks’s longstanding relationship with another multinational technology company that was also considering acquiring Acacia and consulted with Bechtolsheim concerning the potential acquisition. Immediately after learning this information, Bechtolsheim allegedly traded Acacia options in the accounts of a close relative and an associate. The next day, July 9, 2019, before the market opened, Acacia and Cisco announced that Cisco had agreed to acquire Acacia for $70 per share. That day, Acacia’s stock price increased by 35.1 percent. According to the SEC’s complaint, Bechtolsheim’s trading generated combined illegal profits of $415,726 in the accounts of his relative and associate. “We allege that Bechtolsheim, while serving as the chairman of a publicly traded company, abused the trust of a longtime business contact who had shared highly sensitive information about an imminent corporate acquisition,” said Joseph G. Sansone, Chief of the SEC’s Market Abuse Unit. “We will continue to pursue and prosecute misconduct by trusted insiders at all levels of the corporate hierarchy.” Without admitting or denying the allegations in the SEC’s complaint, which was filed in the U.S. District Court for the Northern District of California, Bechtolsheim settled the SEC’s charges by agreeing to be barred from serving as an officer or director of a public company for five years and to pay a civil monetary penalty of $923,740. The settlement is subject to court approval. The SEC’s investigation was conducted by John P. Mogg of the Division of Enforcement’s Market Abuse Unit in the San Francisco Regional Office with assistance from Patrick McCluskey, John S. Rymas, and Ainsley Kerr of the Market Abuse Unit’s Analysis and Detection Center. The matter was supervised by Rahul Kolhatkar and Mr. Sansone. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.