Former IT Administrator Pleads Guilty To Insider Trading Conspiracy Relating To Palo Alto Networks, Inc.
For Immediate Release
U.S. Attorney's Office, Northern District of California
Janardhan Nellore Admits the Insider Trading Conspiracy Made More Than $7 Million in Illegal Profits
SAN JOSE – Janardhan Nellore pleaded guilty today to conspiracy to commit securities fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. The guilty plea was accepted by the Honorable Lucy H. Koh, United States District Judge.
In pleading guilty, Janardhan Nellore admitted to participating in an insider trading scheme by trading on material, nonpublic, inside information that he learned through his employment at Palo Alto Networks, Inc. (“PANW”), where Nellore worked as an IT administrator. Nellore admitted that he obtained confidential information about PANW’s quarterly financial performance and traded on that information before PANW disclosed its financial results to the public. Nellore admitted that he placed illegal inside trades in the brokerage accounts of other people for his own benefit and for the benefit of the account holders around PANW’s quarterly earnings announcements.
Nellore also admitted that he tipped PANW’s nonpublic information to other people who then traded PANW securities around the company’s earnings announcements using this inside information. Nellore admitted that the members of the conspiracy made more than $7 million as a result of their illegal insider trading.
Nellore was indicted by a federal Grand Jury on December 12, 2019, and arraigned on December 17, 2019. Nellore was charged with one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 1349, six counts of securities fraud and aiding and abetting, in violation of 18 U.S.C. §§ 1348 and 2, and three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1). Under the plea agreement, Nellore pled guilty to Count One, conspiracy to commit securities fraud.
Nellore is currently in the custody of the United States Marshal.
Nellore’s next appearance is scheduled for February 26, 2020, before Judge Koh for a status conference on sentencing. The maximum statutory penalty for a violation of 18 U.S.C. § 1349 is 25 years and a fine of $250,000, plus restitution and forfeiture, if appropriate. However, any sentence will be imposed by the court only after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Daniel Kaleba and Patrick R. Delahunty are prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation by the FBI, with the assistance of the San Francisco Regional Office of the Securities and Exchange Commission.
Updated December 18, 2019