A former Amazon.com Inc
Authorities said Brett Kennedy gave fellow University of Washington alumnus Maziar Rezakhani nonpublic information from Amazon`s database, showing that the retailer would lose less money and report higher revenue for the first quarter of 2015 than Wall Street expected, in exchange for $10,000 cash.
In a related civil case, the U.S. Securities and Exchange Commission said Rezakhani made $115,997 trading Amazon shares based on the April 2015 tip, after posting the results on Internet message boards and boasting that the "numbers are so obvious" that a "5 year old can guess what they will do."
Rezakhani was sentenced in March to five years in prison after pleading guilty to fraud charges in a separate case.
U.S. Attorney Annette Hayes in Seattle said Kennedy pleaded guilty to securities fraud in the federal court in that city.
Kennedy, 26, of Blaine, Washington, faces up to 20 years in prison at his Dec. 8 sentencing, but prosecutors will recommend that he serve no more than a year and a day. He agreed to pay $10,875 to settle with the SEC.
"Mr. Kennedy was little more than a kid (24) at the time of the incident," his lawyer Chris Black said in an statement. "He exercised very poor judgment in this case but it was a one-time incident. ... He has taken responsibility for his actions and looks forward to putting this chapter in his life behind him."
The SEC also charged Rezakhani and his former investment adviser Sam Sadeghi, who the regulator said discussed the tip with Kennedy and Rezakhani, and hoped to eventually start a New York hedge fund with Rezakhani.
Sadeghi, 28, agreed to pay $24,215 to settle with the SEC, without admitting wrongdoing. Contact information for his lawyer was not immediately available.
Rezakhani, also 28, pleaded guilty in July 2016 to mail fraud, bank fraud and filing a false tax return after being accused of defrauding Apple Inc
A lawyer for Rezakhani did not immediately respond to a request for comment.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)