The Securities and Exchange Commission (SEC) has filed insider trading charges against a former Coinbase (NASDAQ:COIN) manager Ishan Wahi along with his brother Nikhil Wahi, and his friend, Sameer Ramani. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against all three individuals.
The SEC claims that the trio would orchestrate crypto trades ahead of certain announcements.
The complaint alleges that from at least June 2021 through April 2022, Ishan Wahi helped to coordinate the platform’s public listing announcements that included what crypto made available for trading. Coinbase treated such information as confidential and warned its employees not to trade on the basis of that information but Ishan Wahi ignored these requirements and tipped his brother and Ramini about the announcements in advance of them being posted.
Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were securities according to the SEC, and then typically sold them shortly after the announcements for a profit. The SEC states that the ploy generated illicit profits totaling more than $1.1 million.
Ishan Wahi, 32, is a citizen of India, residing in Seattle, Washington, on a work visa.
Nikhil Wahi, 26, is a citizen of India, residing in Seattle, Washington. The SEC’s complaint states that he is a senior product manager at Salesforce, Inc., where he has been employed since 2017. Nikhil Wahi has apparently refused to respond to an SEC subpoena for documents.
Ramani, 33, is a resident of Houston, Texas, and a citizen of the U.S. The SEC states that he is believed to currently be in India.
Gurbir S. Grewal, Director of the Division of Enforcement, commented:
“We are not concerned with labels, but rather the economic realities of an offering. In this case, those realities affirm that a number of the crypto assets at issue were securities, and, as alleged, the defendants engaged in typical insider trading ahead of their listing on Coinbase. Rest assured, we’ll continue to ensure a level playing field for investors, regardless of the label placed on the securities involved.”
Carolyn M. Welshhans, Acting Chief of the Enforcement Division’s Crypto Assets and Cyber Unit, added:
“As today’s case demonstrates, whether in equities, options, crypto assets, or other securities, we will vindicate our mission by identifying and combatting insider trading in securities wherever we see it.”
The SEC’s complaint, filed in federal district court in Seattle, Washington, charges Ishan Wahi, Nikhil Wahi, and Ramani with violating the antifraud provisions of the securities laws and seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties.
The SEC’s investigation, which is ongoing, was conducted by Michael Brennan, Jennie B. Krasner, and Gregory Padgett, with assistance from Patrick McCluskey and Donald Battle. The case was supervised by Paul Kim, Joseph Sansone, Chief of the Market Abuse Unit, and Ms. Welshhans. The litigation will be led by Daniel Maher and Peter Lallas and supervised by Olivia Choe. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the FBI.