The Securities and Exchange Commission today announced insider trading charges against a former Amazon financial analyst who allegedly leaked confidential information to his former fraternity brother in advance of a company earnings announcement so they could turn an illegal profit.  The college friend and his trading partner also are charged in the SEC’s complaint.
The SEC alleges that Brett Kennedy accessed nonpublic 2015 first quarter earnings information without authorization while working at Amazon and shared it with Maziar Rezakhani, who illegally traded on the financial results before their public release to make more than $116,000 in illicit profits.  According to the SEC’s complaint, Rezakhani paid Kennedy $10,000 in cash for the tip and also shared the trading profits with Sam Sadeghi, who was advising him on his brokerage account trades and joined Rezakhani at a meeting with Kennedy to discuss the nonpublic information.  The SEC’s complaint alleges that Rezakhani and Sadeghi aimed to establish a successful track record with the trading in Rezakhani’s brokerage account and together open a hedge fund in New York that would accept investments from others.
According to the SEC’s complaint, Rezakhani boasted on at least two trading-related internet communication platforms in the days leading up to Amazon’s earnings announcement that he was predicting first quarter revenue of $22.7 billion and earnings per share of -$0.12, writing that the “numbers are so obvious” that a “5 year old can guess what they will do.”
Jina L. Choi, Director of the SEC’s San Francisco Regional Office, said, “As alleged in our complaint, Rezakhani boasted on social media that he could accurately predict Amazon’s financial performance.  But he failed to predict that we would catch him and his accomplices in their illegal scheme.”
Sadeghi and Kennedy agreed to settlements that are subject to court approval.  Without admitting or denying the allegations, Sadeghi agreed to pay disgorgement of $11,599.74 plus $1,035.39 in interest and an $11,599.74 penalty for a total of $24,214.87.  Kennedy agreed to pay disgorgement of $10,000 plus interest of $875.36.  In a parallel action, the U.S. Attorney’s Office for the Western District of Washington today announced criminal charges against Kennedy.
The SEC’s investigation was conducted by Sallie Kim and supervised by Steven Buchholz of the San Francisco office.  The litigation against Rezakhani will be led by Ms. Kim and Mr. Buchholz.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Washington and the Federal Bureau of Investigation.https://www.sec.gov/news/press-release/2017-160
according to the DOJ, Rezakhani secured a line of credit from Foundation Bank in Bellevue, which he used to pay the $25,000 monthly rent at his penthouse; he also bought several luxury cars with the money. Oregon's Pacific Continental Bank bought Foundation Bank in 2016.
After that, Rezakhani attempted another scam involving iPhones, according to the DOJ. He shipped a number of pumice bricks via Federal Express, but claimed that the boxes contained $5 million worth of iPhones. Rezakhani tried to file a claim for the phones with Federal Express and an insurance company, but no money was paid, according to the DOJ.Image result for maziar rezakhani bellevue


Former Amazon employee allegedly leaked earnings results early to fraternity brother

  • The agency alleges Brett Kennedy gave Maziar Rezakhani Amazon's 2015 first quarter earnings information while Kennedy was an employee at the company.
  • Rezakhani also allegedly shared the money with Sam Sadeghi, who advised him on the trades.Jim Bourg | Reuters
    The Securities and Exchange Commission in Washington.
    A former Amazon financial analyst allegedly leaked the company's earnings results to a former fraternity brother in exchange for $10,000, the Securities and Exchange Commission announced Thursday.
    The agency charged Brett Kennedy and Maziar Rezakhani for insider trading. It alleges Brett Kennedy gave Maziar Rezakhani Amazon's 2015 first quarter earnings information while Kennedy was an employee at the company. Rezakhani supposedly paid Kennedy $10,000 in cash for the results and made more than $116,000 in illegal profits from the results, the SEC said.

    Rezakhani also allegedly shared the money with Sam Sadeghi, who advised him on the trades. Sadeghi supposedly met with Rezakhani and Kennedy to discuss the results. The SEC said Rezakhani and Sadeghi wanted to establish a successful track record under Sadeghi's brokerage account and eventually start a hedge fund together.
    Rezakhani predicted Amazon's earnings and bragged on at least two trading-related internet communication platforms that "the numbers are so obvious" that a "5-year old can guess what they will do," according to the SEC.
    "As alleged in our complaint, Rezakhani boasted on social media that he could accurately predict Amazon's financial performance," Jina L. Choi, Director of the SEC's San Francisco Regional Office, said in a statement. "But he failed to predict that we would catch him and his accomplices in their illegal scheme."
    Sadeghi and Kennedy have agreed to settlements without admitting or denying allegations. Both agreements require court approval. Sadeghi has agreed to pay $24,214.87, and Kennedy has agreed to pay $10,875.36, according to the SEC.
    The U.S. Attorney's Office for the Western District of Washington announced criminal charges against Kennedy on Thursday.
    Amazon declined to comment.