School teacher accused of pocketing $1m+ in insider trading using tips from Silicon Valley pal

One of six guys charged over Infinera, Fortinet securities


A teacher who knew too much about some of Silicon Valley's financial figures has been charged with insider dealing by the US Securities and Exchange Commission, along with five alleged accomplices.

Benjamin Wylam, a high school teacher and sports bookmaker who has been charged with participating in an insider trading ring, allegedly said on an internet message board that "insider trading is part of my investment strategy."

Wylam, according to a complaint [PDF] filed by the US Securities and Exchange Commission, is one of six men accused of making stock trades based on non-public financial information from Silicon Valley companies.

"In 2016 and 2017, Defendants Nathaniel Brown, Benjamin Wylam, Naveen Sood, Marcus Bannon, Matthew Rauch, and Naresh Ramaiya engaged in an insider trading scheme involving the securities of Infinera Corporation and Fortinet, Inc," the complaint says. "As a result of the scheme, Defendants obtained nearly $1.7m in illegal profits and losses avoided."

During this period, according to the SEC complaint, Wylam, a resident of San Jose, received repeated tips about the financial performance of Infinera from Brown, a friend who served as Infinera's revenue recognition manager at the time.

Wylam, said to have made more than $1m from insider trading, allegedly passed his information to Sood, who is also alleged to have made stock trades based on the non-public data.

Sood, it's claimed, passed on the information to Bannon, Rauch, and Ramaiya, who subsequently made stock trades based on the non-public data. According to the SEC, Sood owed Wylam a gambling debt in excess of $100,000.

Bannon, while an employee of Fortinet in October 2016, is said to have tipped Sood, Wylam, and Ramaiya to unexpected negative earnings news about his employer before the information became public.

"Using sophisticated data analysis, the SEC was able to uncover this insider trading ring and hold each of its participants accountable to ensure the integrity of our markets,” said Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit, in a statement.

The SEC did not immediately respond to a request to elaborate on its data analysis techniques.

Bannon, Rauch, and Ramaiya, without admitting or denying the SEC claims, have agreed to settle by paying civil penalties of $281,497, $128,230, and $65,780, respectively. Sood has also agreed to settle the charges by paying a civil penalty of $178,320.

The US Attorney’s Office for the Northern District of California is simultaneously pursuing criminal securities fraud charges against Brown, Wylam, and Sood.

Sood, according to the USAO, pleaded guilty on March 31, 2021, and his plea, accepted by US District Judge Edward Chen, was unsealed on Tuesday.

Wylam's legal representative did not immediately respond to a request for comment; court filings haven't yet made Brown's legal representative known. Both men are presumed innocent until proven otherwise. ®


Other stories you might like

  • Experts: AI should be recognized as inventors in patent law
    Plus: Police release deepfake of murdered teen in cold case, and more

    In-brief Governments around the world should pass intellectual property laws that grant rights to AI systems, two academics at the University of New South Wales in Australia argued.

    Alexandra George, and Toby Walsh, professors of law and AI, respectively, believe failing to recognize machines as inventors could have long-lasting impacts on economies and societies. 

    "If courts and governments decide that AI-made inventions cannot be patented, the implications could be huge," they wrote in a comment article published in Nature. "Funders and businesses would be less incentivized to pursue useful research using AI inventors when a return on their investment could be limited. Society could miss out on the development of worthwhile and life-saving inventions."

    Continue reading
  • Declassified and released: More secret files on US govt's emergency doomsday powers
    Nuke incoming? Quick break out the plans for rationing, censorship, property seizures, and more

    More papers describing the orders and messages the US President can issue in the event of apocalyptic crises, such as a devastating nuclear attack, have been declassified and released for all to see.

    These government files are part of a larger collection of records that discuss the nature, reach, and use of secret Presidential Emergency Action Documents: these are executive orders, announcements, and statements to Congress that are all ready to sign and send out as soon as a doomsday scenario occurs. PEADs are supposed to give America's commander-in-chief immediate extraordinary powers to overcome extraordinary events.

    PEADs have never been declassified or revealed before. They remain hush-hush, and their exact details are not publicly known.

    Continue reading
  • Stolen university credentials up for sale by Russian crooks, FBI warns
    Forget dark-web souks, thousands of these are already being traded on public bazaars

    Russian crooks are selling network credentials and virtual private network access for a "multitude" of US universities and colleges on criminal marketplaces, according to the FBI.

    According to a warning issued on Thursday, these stolen credentials sell for thousands of dollars on both dark web and public internet forums, and could lead to subsequent cyberattacks against individual employees or the schools themselves.

    "The exposure of usernames and passwords can lead to brute force credential stuffing computer network attacks, whereby attackers attempt logins across various internet sites or exploit them for subsequent cyber attacks as criminal actors take advantage of users recycling the same credentials across multiple accounts, internet sites, and services," the Feds' alert [PDF] said.

    Continue reading

Biting the hand that feeds IT © 1998–2022