The Securities and Exchange Commission (SEC) has charged four Northern California residents with insider trading in Ross Stores stock options based on nonpublic information about monthly sales results leaked by one of the retailer’s employees.
The SEC alleges that Saleem Khan routinely received tips from his friend Roshanlal Chaganlal, who was a director in the finance department at Ross headquarters in Dublin, California. The commission believes Khan used the confidential information to illegally trade on more than 40 occasions ahead of the company’s public release of financial results.
Also charged with violating the antifraud provisions of the federal securities laws, are Khan’s work colleagues Ranjan Mendonsa and Ammar Akbari.
The insider trading scheme resulted in collective profits of more than $12 million.
“Khan and Chaganlal took advantage of confidential company data to systematically trade in Ross securities and reap millions of dollars in profits,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office. “Even when insider traders try to conceal their profits and kickbacks by using other accounts and intermediaries, we’re committed to piecing together these widespread schemes and catching the perpetrators.”
The SEC alleges that the serial insider trading involving Ross securities began in August 2009 and continued until December 2012, when Chaganlal was terminated by the company. He had access to confidential sales figures on an internal webpage limited to a relatively small group of Ross employees.
The complaint seeks permanent injunctive relief, disgorgement of illicit profits plus interest, and financial penalties. The complaint also seeks an officer-and-director bar against Chaganlal.