Two friends dreamed of opening their own hedge fund. However, they needed a strategy to gain correct insights into tech giants’ future moves. Instead of resorting to the hard way, the two of them turned to a friend who was also an Amazon insider. The mole delivered them enough illegal tips for them to appear as top traders. However, SEC sniffed their shabby operation eventually.
The Group of Three Planned to Build a Reputation and Open a Hedge Fund to Channel Their Momentum
Maziar Rezakhani and Sam Sadeghi performed $10,000 worth of payments to Amazon analyst Brett Kennedy. The merchandise they acquired through these funds was nonpublic data. The U.S. Securities and Exchange Commission stated on Thursday that this was the way the two wannabe traders learned about company’s 2015 earnings after the first quarter.
Through this move, they aimed at building an impressive reputation for themselves. Afterwards, they would have opened a New York hedge fund together to serve those hyped on their valuable insights. Trader Rezakani and Amazon insider Kennedy were friends since 2009. They even attended the same fraternity organization during college.
In the end, the illegal trades amounted to $116,000, and the profits were stocked in a brokerage account created in the name of Rezhakani. Before Amazon issued its quarterly report, Rezakhani published the real numbers claiming to messaging boards that the results were obvious even for a 5-year-old. He started building up from there an image of a know-it-all trader on social media.
The Two Wannabes and Amazon Insider Have to Pay Heavy Settlemens
However, SEC’s new charges have to wait. Rezakhani is currently getting ready to serve five years in prison. This sentence is the outcome of a guilty plea in a fraud case concerning Apple Inc, the U.S. Internal Revenue Service, and other shipping companies.
In this scheme, Rezakhani ordered numerous iPhones with resale rights. However, he ended up claiming that his order was stolen before it reached him. Nonetheless, his luxurious lifestyle gave him away, and he is to pay $3.5 million in restitution.
As for SEC’s case, Kennedy agreed to a $10,000 settlement without commenting on the validity of agency’s allegations. Sadeghi has to pay another $24,000 without revealing his position regarding this wrongdoing.
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