(Image source from: 2 Indian-Origin Entrepreneurs Charged With Insider Trading in US)

Two Indian-origin entrepreneurs have been charged with unlawful insider trading in the US in connection with the 2013 proposed acquisition of American company Cooper Tire and Rubber by Apollo Tyres.

Amit Kanodia of Massachusetts, a 47-year-old private equity investor, and a general partner at a venture capital firm - Iftikar Ahmed of Connecticut, have been charged with fraud by the Securities and Exchange Commission (SEC) in a complaint filed in US district court in Connecticut.

According to the reports, SEC has mentioned that Kanodia tipped Ahmed and another friend after learning of the deal from his wife, who was Apollo’s general counsel at the time, more than two months before the merger was announced. Hence Ahmed bought (significant amounts) stock and options of Cooper Tire. Soon after the deal has become public, Ahmed liquidated his Cooper Tire holdings, reaping $1.1 million of ill-gotten profits. And Ahmed transferred $220,000 to Lincoln Charitable Foundation, a supposed charity that Kanodia controlled.

The Cooper Tire and Rubber has lost heavily due their (Amit Kanodia and Iftikar Ahmed) planned execution.

-Kannamsai