The Securities and Exchange Commission in the US has charged five physicians with insider trading in the securities of Medical Professional Liability Insurer.
The federal watchdog accused the five medicos and said that one of the prime accused Apparao Mukkamala received the confidential information from board meetings and other communications about the anticipated acquisition of American Physicians Capital (ACAP) by another insurance company.
After obtaining the confidential inputs, Mukkamala shared the nonpublic information with fellow physicians and friends Suresh Anne, Jitendra Prasad Katneni, Rao AK Yalamanchili and Mallikarjunarao Anne.
The SEC alleged that the five accused purchased substantial stock of ACAP before looming sale and garnered $623,000 in illegal profits on the sale of their ACAP stock, claimed SEC.
Without admitting or denying the allegations in the SEC’s complaint, all the medicos have agreed to recompense over $1.9m for the settlement of the SEC’s charges.
Under the proposed settlement, which is subject to court approval, Mukkamala agreed to pay nearly $631,000. Mallikarjunarao Anne agreed to reimburse almost $253,000. Suresh Anne will compensate $697,000. Katneni agreed to pay approximately $22,000, while Yalamanchili will have to cough up nearly $298,000.
SEC’s Chicago office Senior Associate Regional Director Robert Burson said the physicians made numerous purchases of ACAP shares that were detected as highly unusual when compared to their past trading patterns.