Amit Kanodia, Insider Trading Scheme, Mass 2024

BROOKLINE, Mass. — A 49-year-old Brookline man has been sentenced to 20 months in federal prison for orchestrating a high-stakes insider trading scheme that pumped more than $1 million in illegal profits to him and two co-conspirators. Amit Kanodia, a former corporate insider with access to confidential acquisition talks, tipped off two friends ahead of a major international tire company merger, turning quiet stock trades into a criminal windfall.

Kanodia was sentenced today in U.S. District Court in Boston by Judge Nathaniel M. Gorton, who handed down a 20-month prison term, two years of supervised release, 100 hours of community service, a $200,000 fine, and forfeiture of $242,500. That forfeiture amount reflects Kanodia’s cut of the illicit gains generated from trading on nonpublic information about the proposed acquisition of Cooper Tire & Rubber Company by India-based Apollo Tyres.

The scheme dates back to spring 2013, when Kanodia learned of the impending deal through his wife, who served as General Counsel for Apollo at the time. Leveraging that privileged access, he passed confidential details to Iftikar Ahmed and Steven Watson, who immediately began purchasing Cooper Tire shares and call options. The stock trades were timed to exploit the near-41% spike in Cooper Tire’s share price the day the acquisition was made public.

Following the announcement, Ahmed and Watson unloaded their positions, raking in over $1 million in illegal profits. As part of their agreement, both men paid Kanodia a cut of the haul—money that federal prosecutors successfully traced and now demand be forfeited. Kanodia was convicted in October 2016 by a federal jury after a six-day trial on one count of conspiracy and 10 counts of securities fraud.

Steven Watson, one of the traders who acted on Kanodia’s tip, was sentenced in November 2016 to two years of probation, fined $25,000, and ordered to forfeit $170,000. Iftikar Ahmed, the other beneficiary of the insider information, remains a fugitive and is currently at large, according to federal authorities.

The case was announced today by Acting U.S. Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the FBI’s Boston Field Division. The U.S. Attorney’s Office credited critical support from the Securities and Exchange Commission. Prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Brian Perez-Daple of the Economic Crimes Unit, the conviction underscores the federal crackdown on insider trading networks that exploit corporate trust for personal gain.

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