A former Amazon financial analyst who allegedly leaked confidential financial about quarterly earnings to a former fraternity brother has been brought up on insider trading charges by the U.S. Securities and Exchange Commission. The former fraternity brother and his trading partner were also charged.
The SEC alleges that Brett Kennedy, the Amazon analyst, passed along information on first quarter 2015 earnings figures before they became public to Maziar Rezakhani. Rezakhani allegedly used the information to make profits of $116,000 in illegal trades. Rezakhani predicted Amazon’s first quarter revenue of $22.7 billion and losses per share of 12 cents on two trading-related forums, writing that the “numbers are so obvious” that a “5 year old can guess what they will do.”
“As alleged in our complaint, Rezakhani boasted on social media that he could accurately predict Amazon’s financial performance,” Jina L. Choi, director of the SEC’s San Francisco regional office, said in a statement. “But he failed to predict that we would catch him and his accomplices in their illegal scheme.”
The U.S. Attorney’s Office for the Western District of Washington also filed charges against Kennedy.
The SEC alleges that Rezakhani paid Kennedy $10,000 in cash for the information leak, and sought to leverage what appeared from the outside to be on-point predictions of Amazon financials to establish a hedge fund with his trading partner Sam Sadeghi.