STEC Chief Executive Charged with Insider TradingFriday, July 20, 2012
The SEC also alleges that Moshayedi was told by EMC executives on Aug. 3 the company would not make commitments on any additional purchases, yet he withheld that information from investors prior to the secondary offering while touting in public documents the future growth of the ZeusIOPS product and a $120 million agreement with EMC.
The SEC contends that Moshayedi subsequently entered into a secret deal with EMC to meet third quarter revenue estimates.
The complaint claims Moshayedi convinced EMC on July 29 to buy $55 million of ZeusIOPS product in the third quarter in exchange for an undisclosed $2 million price discount on the product in the fourth quarter.
The SEC is charging Moshayedi with violating the anti-fraud provisions of U.S. securities laws and seeks a final judgment ordering him and his brother to relinquish any trading profits, pay prejudgment interest and financial penalties, and be permanently barred from serving as an officer and director of any registered public company.
The SEC’s investigation was conducted by Finola Manvelian and Douglas Kobayashi in the Los Angeles Regional Office.
John Berry will lead the litigation.
The Business Journal first reported the SEC was considering a civil injunction action against “the company, its CEO and president, charging them with violations of the antifraud and reporting provisions of the federal securities laws,” in August 2011.
Regulators began looking at the company in 2009 to determine if it violated federal securities laws by making false and misleading statements.
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