Thursday, April 2, 2015

Friends Charged With Making $1.1M From Insider Trading On Cooper Tire and Rubber (CTB)

The SEC charged Amit Kanodia, of Brookline, Massachusetts, an entrepreneur and private equity investor, and Iftikar Ahmed, of Greenwich, Connecticut, a general partner at a venture capital firm, with insider trading on the proposed acquisition of Cooper Tire and Rubber (NYSE: CTB) by Apollo Tyres Ltd. (NSE: APOLLOTYRE).

The SEC alleges that Kanodia tipped Ahmed before the acquisition was announced after originally finding out about the deal from his wife. Kanodia's wife was the general counsel at Apollo at the time and was working on the deal. Even though the deal never went through, Cooper Tire's stock price, a company based in Findlay, Ohio, jumped 41% when it was announced. Ahmed bought up significant amounts of Cooper stock and when the deal was announced, Ahmed sold his holdings for a $1.1 million gain. Later, Ahmed paid Kanodia $220K for his "help" through his Lincoln Charitable Foundation. The SEC alleges this payment was a kickback and has named the charity as one of the relief defendants.