In House - The FindLaw Corporate Counsel Blog

Amazon Employee Sold Sensitive Company Info to Trader

What could Amazon's general counsel do when an employee sold sensitive company information?

Fire the bum? Put him up for sale on the website? Issue an explanatory press release about the sale -- of the information?

The Securities and Exchange Commission helped out by explaining the details in a press release. Brett Kennedy, an Amazon financial analyst, reportedly sold inside information for $10,000.

The chips, and any prison sentences, will fall where they may. General counsel may want to pick up some pieces of the story for future reference.

Stock Plot

The story started in the figurative Amazon jungle of stock speculation. Jeff Bezos launched the corporation in 1994 on no promise that the webtailer would be profitable anytime soon.

Investors gobbled up the stock in megabytes when the company went public a year later. Bezos is now neck-and-neck with Bill Gates for the richest-man-in-the-world prize.

Maziar Rezakhani apparently thought it was his turn to get rich quick. He paid Kennedy, a brother in his fraternity, for access to Amazon's 2015 first-quarter earnings results.

Rezakhani then traded on the information, making more than $116,000 in stock profits, according to the Department of Justice.

Internet Chatter

The SEC caught Rezakhani boasting on trading-related platforms in the days leading up to Amazon's earnings announcement. He predicted the company's revenue and said the "numbers are so obvious" that a "5 year old can guess what they will do."

Jina L. Choi, director of the SEC's San Francisco office, said Rezakhani may have predicted Amazon's numbers, but he "failed to predict that we would catch him and his accomplices in their illegal scheme."

Kennedy pleaded guilty after securing a recommendation that he serve no more than one year in jail. Rezakhani is already serving five years for defrauding Apple, Inc. and other companies in a separate matter.

Once the legal process is complete, however, they will also have to disgorge any ill-gotten profits. That's not a promise, just a prediction.

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