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Press Release

Brookline Man Convicted by Federal Jury of Million Dollar Insider Trading Scheme

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – A Brookline man was convicted today by a federal jury in Boston of conspiracy and securities fraud after tipping off two friends in connection with an insider trading scheme that netted more than $1 million in illegal profits.  

Amit Kanodia, 49, was convicted following a six-day jury trial of one count of conspiracy and 10 counts of securities fraud, with each count representing the purchase of Cooper Tire securities by co-conspirators Iftikar Ahmed and Steven Watson.  Kanodia was acquitted of eight additional counts of securities fraud related to other purchases made by Ahmed and Watson.  U.S. District Court Judge Nathaniel G. Gorton scheduled sentencing for Jan. 18, 2017 at 3pm.  Ahmed remains a fugitive from justice.  Watson has pleaded guilty and is set to be sentenced in November. 

In the spring of 2013, Kanodia tipped off his two friends, Ahmed and Watson, about the contemplated acquisition of Cooper Tire & Rubber Company by India-based Apollo Tyre.   Kanodia learned about the possible acquisition from his wife who was the General Counsel of Apollo at the time.  In the months leading up to the public announcement of the acquisition, both Ahmed and Watson purchased shares and options in Cooper Tire which trades on the New York Stock Exchange.  On the day of the announcement, Cooper Tire’s share price increased 41% and Ahmed and Watson began selling their interests in the company for a combined profit of more than $1 million.  Both Ahmed and Watson paid Kanodia a portion of their illegal profits.

The conspiracy statute provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain/loss, whichever is greater.  The securities fraud statute provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $5 million.  Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The U.S. Attorney’s Office received valuable assistance from the Securities & Exchange Commission.  Assistant U.S. Attorneys Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit, and Brian Perez-Daple, also of Ortiz’s Economic Crimes Unit are prosecuting the case.

Updated October 17, 2016

Securities, Commodities, & Investment Fraud