Three Twilio software engineers were charged with insider trading by the SEC on Monday. The employees, along with family and friends, allegedly made more than $1 million in profits by trading Twilio stock prior to the company's earnings announcement in May 2020.
According to the SEC, Hari Sure, Lokesh Lagudu and Chotu Pulagam wrote in a chat that Twilio's stock price would "rise for sure," after accessing company databases in the early days of the pandemic that showed increased use of Twilio's products and services by customers.
The SEC's complaint alleges that based off this confidential knowledge Sure, Lagudu and Pulagam either tipped off or used the brokerage accounts of family and friends to trade Twilio stock and options ahead of the earnings announcement. Twilio reported a 57% jump in first-quarter revenue in May 2020, which far surpassed Wall Street estimates and caused the company's stock to jump 25%."We allege that this insider trading ring took advantage of valuable revenue information related to the pandemic at a San Francisco tech company," said SEC regional director Monique Winkler. "We are holding these alleged tippers and tippees accountable for their roles in the scheme."