India’s Securities and Exchange Board says staff at services giant Infosys committed insider trading.
An interim order posted on May 31 states that the board’s systems generated insider-trading alerts in July 2020, a time when Infosys was close to announcing its financial results for the quarter ended June 30.
The regulator named Venkata Subramaniam, a senior principal in Infosys corporate accounting group, as being privy to those results. Subramaniam was in contact with Pranshu Bhutra, senior corporate counsel at the services giant.
Phone records show Bhutra was often in touch with outsiders who worked at firms named Tesora Capital and Capital One Partners.
Both firms traded in Infosys stock before the release of the financial results yet had not previously traded in the IT giant's shares. Both also generated proceeds of over $350,000 from their Infosys trades.
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The board’s interim order lays out its case in great detail, listing calls between the parties, trades in Infosys stock, records drawn from bank statements, and more. It concludes that the two Infosys staffers named were insiders as defined by Indian law and that all eight players in the scheme are on the wrong side of the law.
All have been barred from trading shares. Tesora Capital and Capital One Partners have been ordered to repay the aforementioned ill-gotten gains.
Infosys appears to have been surprised by news of the scandal as the IT services titan's statement on the matter says it was informed of the fraud on June 1, the day after the order was issued.
“Infosys has a well-defined code of conduct covering all its employees and an insider trading policy that governs dealing with unpublished price sensitive information,” the statement added, continuing: “The company will extend full cooperation … on the matter. Additionally, as a result of the order, an internal investigation is being initiated and appropriate action will be taken on the conclusion of such investigation.”
Those named in order have about a month to file any objections and request a hearing to give their versions of events. ®