Former Amazon financial analyst, Brett Kennedy, pleaded guilty to insider trading. Per reports from several sources, Kennedy gave out non-public information from Amazon’s database and financial records in exchange for a fee.
Kennedy gave Maziar Rezakhani, his fraternity brother and fellow University of Washington alumnus, confidential details from Amazon’s financial reports that stated the company showed lower losses and higher revenues in the first quarter of 2015. In return, Rezakhani gave him $10,000 cash.
The U.S. SEC (United States Securities and Exchange Commission) reported that Rezakhani made $115,997 from trading Amazon shares on the noted tip. The SEC said, “Numbers are so obvious that a 5-year-old can guess what they will do.” Rezakhani was sentenced for five years in prison after pleading guilty to charges of fraud in a separate case.
On Thursday, U.S. Attorney Annette Hayes said Kennedy pleaded guilty to securities fraud in Seattle’s federal court. Kennedy faces up to 20 years in prison upon sentencing in December. The prosecutors, however, plan to recommend that he serve no more than a year and a day. He agreed to pay $10,875 to settle with the SEC.
“Mr. Kennedy was little more than a kid (24) at the time of the incident. He exercised very poor judgment in this case but it was a one-time incident. He has taken responsibility for his actions and looks forward to putting this chapter in his life behind him,” his lawyer Chris Black said in a statement.
Apart from Kennedy, the SEC also charged Rezakhani and Sam Sadeghi, who was his former investment advisor. The two planned on starting a New York Hedge Fund together. Sadeghi agreed to pay $24,215 to settle with the SEC, without pleading guilty. Rezakhani pleaded guilty in July of 2016 to charges of mail fraud, bank fraud, and filing a false tax return after being accused of defrauding Apple.
Details on the fate of the former Amazon financial analyst Brett Kennedy will be revealed later. However, there seems to only be two possibilities: imprisonment and fines or a settlement outside of court with the SEC.