The U.S. Securities and Exchange Commission is charging three Twilio Inc (NYSE:TWLO) software engineers with insider trading and alleging that several of their associates were also involved.
What Happened: Lokesh Lagudu, Chotu Pulagam and Hari Sure allegedly accessed materials, including nonpublic information, regarding Twilio’s revenue through company databases.
Each member of the trio then tipped close friends and family members who traded ahead of Twilio’s first-quarter earnings announcement on May 6, 2020, according to a complaint filed by the regulator in a U.S. District Court in California.
The engineers communicated with each other in a private chat room using Telugu, a language predominantly spoken in Southern India, as per the complaint.
“We allege that this insider trading ring took advantage of valuable revenue information related to the pandemic at a San Francisco tech company,” said Monique C. Winkler, acting regional director of the SEC’s San Francisco regional office.
"We are holding these alleged tippers and tippees accountable for their roles in the scheme."
Why It Matters: The trading ring netted over $1 million in illicit profits, according to the complaint. No confirmation of the employment status of the three Twilio employees was available, according to a report from CNBC.
“The company is aware of the investigations being conducted by the U.S. Attorney’s Office and the Securities and Exchange Commission and the charges that were filed today,” said a Twilio spokesperson, according to CNBC.
The spokesperson said that the company is cooperating with both agencies.
Twilio, a purveyor of programmable communication tools for making and receiving phone calls, released its fourth-quarter results last month reporting a loss per share of $0.20 against an estimated loss per share of $0.21.
Revenue came in at $842.74 million as against the Street estimates of $767.84 million, according to Benzinga Pro data.
Price Action: Twillo shares closed 3.8% higher at $160.75 in the regular session and fell 0.5% in the after-hours trading.
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Photo: Courtesy of Ken Yeoung via Flickr
