The Securities and Exchange Commission (SEC) has entered final judgment against Andreas “Andy” Bechtolsheim, the founder and chief architect of Silicon Valley-based technology company Arista Networks, Inc, in a lawsuit alleging he engaged in insider trading.
The SEC alleged in its complaint, filed March 26, 2024, that Bechtolsheim, who was the chairman of Arista Networks at the time, illegally traded Acacia options on July 8, 2019, after learning of Acacia’s impending acquisition through the long of his and Arista Networks’ relationship with another multinational technology company that was also considering a takeover of Acacia.
Immediately after learning this information, Bechtolsheim allegedly traded Acacia rights to the accounts of a close relative and associate. The next day, July 9, 2019, before the market opened, Acacia and Cisco announced that Cisco had agreed to acquire Acacia.
According to the SEC’s complaint, Bechtolsheim’s trades generated a combined $415,726 in illegal profits in his relative’s and associate’s accounts.
Without admitting or denying the allegations in the SEC’s complaint, Bechtolsheim consented to entry of judgment charging him with violating the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 under it, bars him from serving as an officer or director of a public company for five years and orders him to pay a civil monetary penalty of $923,740.