A Silicon Valley heavyweight has been charged with insider trading by the US Securities and Exchange Commission.

Andreas "Andy" Bechtolsheim, co-founder of Sun Microsystems and an early Google investor, is [1]accused of using his knowledge of Cisco's 2019 acquisition of Acacia Communications to buy options in Acacia using the accounts of a close relative and associate.

Andy Bechtolsheim, who was at the time chair of Arista Networks, a datacenter networking firm he co-founded, was aware of the deal because he had been consulted on it by "another multinational technology company" that had also been considering acquiring Acacia, the SEC says.

[2]

According to the SEC's [3]complaint , the manager at the unnamed company that was considering acquiring Acacia texted Bechtolsheim that he "needed to chat rather urgently regarding a possible transaction in the optics space."

[4]

[5]

The SEC alleges Bechtolsheim "immediately" acquired Acacia option contracts when learning of the pending purchase by Cisco, which earned him $415,726 in profit when markets opened and Acacia shares rose 35 percent on news of the purchase.

[6]Bechtolsheim 'leaves' Sun for switches start-up

[7]Bechtolsheim's baby Arista Networks soars in stock market debut

[8]Former Adobe software engineering leader convicted of insider trading

[9]Token prison sentence for first convicted NFT insider trader

The complaint alleges that Bechtolsheim "knew or was reckless in not knowing" that the information he was given was non-public, and that he had a duty to keep that information confidential.

"We allege that Bechtolsheim, while serving as the chairman of a publicly traded company, abused the trust of a longtime business contact who had shared highly sensitive information about an imminent corporate acquisition," said SEC market abuse unit chief Joseph G Sansone.

Bechtolsheim has agreed to pay a civil penalty of $923,740 for earning slightly more than half that for his illegal trades, and has also agreed to be barred from serving as an officer or director of a public company for five years.

[10]

Forbes [11]lists Bechtolsheim's net worth at somewhere north of $16 billion. The SEC fine is less than 0.006 percent of his holdings. ®

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[1] https://www.sec.gov/news/press-release/2024-40

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZgL-Jk8coU64fWUtzv4HfAAAAEs&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-40.pdf

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZgL-Jk8coU64fWUtzv4HfAAAAEs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZgL-Jk8coU64fWUtzv4HfAAAAEs&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[6] https://www.theregister.com/2008/10/23/sun_arista_bechtolsheim/

[7] https://www.theregister.com/2014/06/06/arista_networks_ipo/

[8] https://www.theregister.com/2024/01/04/adobe_engineer_insider_trading/

[9] https://www.theregister.com/2023/08/23/nft_insider_trading_prison/

[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZgL-Jk8coU64fWUtzv4HfAAAAEs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[11] https://www.forbes.com/profile/andreas-von-bechtolsheim/

[12] https://whitepapers.theregister.com/