Sivannarayana Barama

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26060 / July 29, 2024

Securities and Exchange Commission v. Sivannarayana Barama, No. 5:19-CV-08207-RS (N.D. Cal. filed Dec. 17, 2019)

SEC Wins Summary Judgment Against Former Silicon Valley Software Engineer in Multimillion Dollar Insider Trading Ring Case

On July 25, 2024, Judge Richard Seeborg of the U.S. District Court for the Northern District of California granted the SEC’s motion for summary judgment against Sivannarayana Barama and entered a final judgment against Barama, finding him liable for almost $8.5 million as a result of insider trading.

The SEC filed its complaint against Barama in December 2019, alleging that he was part of an insider trading ring that made over $7 million. The complaint alleged that Barama and three other defendants received tips from Janardhan Nellore, a former IT administrator at Palo Alto Networks, Inc., regarding the company’s confidential earnings information. Barama and the other defendants then allegedly traded in Palo Alto Networks, Inc.’s securities based on the tips before multiple earnings announcements between 2015 and 2018. Nellore and the three other defendants previously settled their cases with the SEC, with judgments entered by the Court against them. In finding Barama liable, the Court’s order concluded that Barama’s conviction in the related criminal case for securities fraud under 18 U.S.C. § 1348(2), United States v. Sivannarayana Barama, No. 19-CR-00463-RS (N.D. Cal.), precluded further litigation in the SEC’s action.

The Court’s final judgment permanently enjoins Barama from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and finds Barama liable for disgorgement of $6,283,079 and prejudgment interest thereon of $2,179,658. The Court ordered that Barama shall satisfy the disgorgement and prejudgment interest obligations by paying $8,462,737 to the SEC within 30 days of any final disposition of the appeal in the related criminal case that does not effect a reversal of the judgment in that action.

The SEC’s litigation was led by John P. Mogg, Chrissy Filipp, and Jason Bussey, and supervised by Monique C. Winkler and Jason H. Lee, all of the SEC’s San Francisco Regional Office. The SEC’s investigation was conducted by Mr. Mogg, Ms. Filipp, and Crystal Boodoo.