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October 15, 1999
Ex-Banker Sekhri Denied Bail
R S Shankar in New York
When high-flying investment banker Arjun Sekhri suddenly disappeared two years ago, some of his friends suspected foul play. But within a few days of Sekhri's disappearance, they learnt that Sekhri had been accused of one of the most detested of crimes on the Wall Street -- inside trading.
A fugitive for more than 18 months, Sekhri was arrested in Australia a few months ago. This week a New York judge ordered the 34-year-old man be held without bail.
Sekhri, a former employee in the mergers and acquisitions department of Salomon Smith Barney, is charged with money-laundering and inside trading. He had quit the firm and joined a Boston company when his alleged misdeeds were discovered. He was initially charged on March 16, 1988.
If convicted Sekhri faces up to 20 years in prison. He could also be fined two times the $ 1.8 million he reportedly made through illegal means.
The Securities and Exchange Commission filed an insider trading case against Sekhri and five others to whom Sekhri supplied confidential information, including his father-in-law. The complaint alleges that, from September 1997 through January 1998, Sekhri, Amolak Sehgal, Pratima Rajan, Fuad Dow, Gordon W Cochrane and Martin L Thifault engaged in a highly profitable insider trading scheme by collectively purchasing call options and/or common stock shortly before six major corporate announcements.
According to the SEC, Sekhri tipped Dow, Sekhri's former college roommate. Dow then tipped Cochrane and Thifault. Then all three collectively purchased common stock and/or call options on the stock of MCI Communications Corp, Brooks Fiber Properties, Inc, Carson Pirie Scott & Co, Central and South West Corp, and Southern New England Telecommunications Corp in advance of six different public announcements of significant mergers involving these companies.
Sekhri also tipped Sehgal, his father-in-law, in advance of at least four of these announcements, and his friend Rajan, of at least three of these announcements.
The complaint also seeks relief and compensation from Mahendra and Sharda Sekhri, parents of Arjun Sekhri.
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