Indian American pleads guilty to insider trading worth $8m
Representative image (iStock)
AN Indian American former IT executive has pleaded guilty to insider trading and aiding in the preparation of a false tax return.
Dayakar Mallu, 51, faces a maximum penalty of 25 years in prison for the conspiracy and three years in prison for the tax offence, according to a statement.
His sentence will be pronounced on January 24.
Mallu conspired with others to trade in the securities of Mylan, a NASDAQ-listed public company, in advance of corporate announcements concerning drug approvals, financial earnings, and a merger between 2017 and 2019, court documents have revealed.
He was the then vice president of Global Operations Information Technology of Mylan. Mallu urged another Mylan executive, who was an unnamed co-conspirator in the case, to provide him with material, non-public information in advance of the company’s public announcements.
He then placed trades in the company’s securities and shared trading profits with his co-conspirator through cash transactions in India, reports said.
His trading resulted in more than $8 million in unrealised profits and losses were avoided.
Mallu ultimately realised net profits and losses avoided of more than $4.2m from his insider trading, the department of justice (DoJ) said.
He admitted in the court, that he had sent false information to his tax preparer relating to Opel Systems LLC, a company he owned and controlled.
Mallu falsely told the preparer that Opel had paid $1.3m to a contractor when, in fact, he had caused Opel to transfer those funds to his securities brokerage account.
According to the DoJ, Mallu’s false statement resulted in the preparation of a false 2015 corporate return for Opel.