East Bay Resident Charged With Insider Trading In Ross Stores Securities
Scheme to defraud allegedly generated illegal profits in excess of $8.2 million
OAKLAND – Saleem Mohammad Khan was arrested today following an indictment by a federal grand jury in San Francisco charging him with conspiracy and seven counts of securities fraud, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
According to the indictment unsealed this morning, Khan, 53, of Dublin, Calif., is alleged to have participated in an insider trading scheme in which an unnamed co-conspirator provided Khan with confidential, non-public, material, inside information about the financial performance of Ross Stores, Inc., then headquartered in Pleasanton, Calif. Using the information, Khan allegedly bought and sold securities issued by Ross Stores traded on the NASDAQ stock exchange. Khan sometimes tried to conceal this scheme to defraud by using the brokerage accounts of one or more third persons. According to the indictment, between in or about August 2009 and late 2012, Khan and others generated illegal profits in excess of $8.2 million as a result of this insider trading scheme. Khan is charged with one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 1349, and seven counts of securities fraud, in violation of 18 U.S.C. § 1348.
Khan was arrested this morning in Dublin, and made his initial appearance in federal court in Oakland today before U.S. Magistrate Judge Kandis A. Westmore. Magistrate Judge Westmore released Khan on a $300,000 bond and scheduled further hearings, including arraignment, before U.S. Magistrate Judge Donna Ryu for June 7, 2017.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 25 years in prison, and a fine of $250,000 for each count of conviction, plus restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Kyle F. Waldinger and Adam A. Reeves are prosecuting the case with the assistance of Allen Williams and Bridget Kilkenny. The prosecution is the result of a five year investigation by the FBI and United States Securities and Exchange Commission.