Dileep Kumar Reddy Kamujula, Insider Trading Securities Fraud Scheme, California 2023

OAKLAND – A federal grand jury handed down an indictment charging Dileep Kumar Reddy Kamujula, 35, of Fremont, Calif., with securities fraud in connection with an alleged illegal securities trading scheme based on inside information obtained from an employee of San Francisco-based cloud communications company Twilio, Inc.

According to the indictment, Kamujula illegally traded in Twilio stock options after receiving material nonpublic information from an employee identified in the indictment as ‘Insider One.’ The indictment alleges that as part of Insider One’s employment, the employee had regular access to a financial records system used by Twilio to monitor and account for customer sales.

The indictment alleges that Insider One accessed confidential information concerning Twilio’s financial results before those results were made public and passed on the information to Kamujula. Twilio maintained written policies prohibiting the dissemination of such material nonpublic and confidential information.

The indictment describes how Kamujula obtained and used insider information in the Spring of 2020 for his own gain. According to the indictment, beginning April 9, 2020, Insider One provided Kamujula with confidential nonpublic information regarding Twilio’s financial results before those results were publicly disclosed.

Kamujula is charged with two counts, and a forfeiture allegation. The first count charges a violation of 18 U.S.C. §§ 1348 and 2, and the second count charges a violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240, 10b-5, and 240.10b5-1 (also referred to as Section 10(b) of the Securities Exchange Act of 1933 and Rule 10b-5 thereunder).

In total, Kamujula purchased approximately 257 call options for a total cost of approximately $133,333. On May 7, 2020, the day after Twilio announced its quarterly earnings, Kamujula sold all 257 Twilio call options he had acquired in the preceding four weeks for a total profit of approximately $961,662.

Kamujula is currently facing the consequences of his actions. The maximum statutory penalty for a violation of the charges against him is not specified in the article. As of now, no sentencing date has been set.

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