A former network administrator of cybersecurity company Palo Alto Networks, as well as four of his friends, are being prosecuted for three years of insider trading.
The man allegedly has abused his access to crucial systems to acquire insider information, The New York Times reports. He passed that information on to his friends.
The man and his friends used the information to trade stock just before quarterly figures were published, according to the U.S. government. They made more than $7 million.
The group allegedly had been active since 2015. The suspects did not stop trading until 2018.
Palo Alto ‘Baby’
The suspects called Palo Alto Networks ‘baby’ amongst each other. They tried to bypass detection by using cash, some of the time.
Using an analysis tool, the American Securities and Exchange Commission (SEC) discovered that “strange transactions” were taking place around Palo Alto. The SEC are especially proud of their discovery because the new tool has turned out to be efective, they say in a statement to the newspaper.
The man in question was arrested at the airport in May. He and his family were on their way to India. He had not booked a return ticket.
The lawyer of one of the man’s friends points out in the New York Times that his client has not been arrested. Therefore, he says, “it is clear who knew that this was private information, and who did not.”
Palo Alto Networks specialises in cloud security. The company is worth 2.27 billion dollars.