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Infosys and Wipro employees charged with insider trading

Undisclosed information allegedly shared earns one $350k, but he doesn't get to keep it

Two tech execs, one at Infosys and another at Wipro, are in trouble with the Securities and Exchange Board of India (SEBI) after they were accused of insider trading of Infosys stock, according to a late September filing.

SEBI said in its interim order [PDF] that an alert system had notified the regulatory body of suspicious activity that triggered an investigation into insider trading.

It alleged that Wipro's senior vice president, Keyur Maniar, had traded on Infosys stock starting 8 July, just before it soared.

The boost in price came from a partnership Infosys secured with Vanguard and announced on 14 July. Maniar started selling off shares the very next day after the announcement, and by 18 July he had cashed out, earning $350,000 (Rs 2.6 crore) in the process.

SEBI deemed Maniar's behaviour out of character. It said he had almost no trading history in the months prior or after the suspicious trade. In fact, it added, the only time he traded between January and June 2020 was in April, on an amount the Interim Order describes as "miniscule". The Infosys trade in question was nine times the size of the April 2020 trade, it said.

Wipro and Infosys were final contenders for the deal with Vanguard, and Maniar was the designated person in charge of making it happen at Wipro, the filing continued. Wipro was eliminated from the competition in March.

On 29 June, the winner of the Vanguard deal was communicated to select associated parties at Infosys. Internally it was believed it would propel revenue growth in the company's financial services vertical.

And – according to call records detailed in the order – who had a phone call with Maniar a mere seven minutes before his first questionable Infosys stock purchase? Someone whom it alleged semi-regularly communicated with Maniar: Infosys solution design head Ramit Chaudhri.

Chaudhri and Maniar were former colleagues from Chaudhri's previous 2012-2014 employment at Wipro. Chaudri also happened to be on Infosys's list of employees directly or indirectly associated with the Vanguard deal.

SEBI has also alleged that Chaudri had unpublished price-sensitive information and he had provided that to Maniar.

SEBI has restrained the duo from buying, selling or dealing in securities both directly or indirectly, and frozen their bank accounts to the extent of the Rs 2.6 crore ($350,000). They also were ordered to open an escrow account and deposit their gains from the deal. The pair now have 21 days to present their defence to investigators.

Despite having what Infosys calls a "a well-defined code of conduct covering all its employees and an insider trading policy that governs dealing with unpublished price sensitive information," this is not the first time employees from the Indian multinational IT company have been in trouble for insider trading.

This past June, SEBI determined a senior principal in an Infosys corporate accounting group leaked quarterly financial results to a buddy who also traded on the information, resulting in a similar profit of around $350,000. ®

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