Jury Convicts Fremont Man of Insider Trading Scheme at Palo Alto Networks

A federal jury in San Francisco has convicted Sivannarayana Barama, a former IT professional at multiple Silicon Valley technology firms, of four counts of securities fraud for using confidential inside information about Palo Alto Network’s financial performance to trade in the company’s securities.

United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp announced the guilty verdicts that came at the end of a one-week trial before Chief United States District Judge Richard Seeborg.

Barama and a co-defendant were charged with securities fraud and conspiracy to commit securities fraud in December 2019. The co-defendant pleaded guilty to related charges in 2019. Barama proceeded to jury trial, and the jury returned its verdicts against Barama on Dec.13.

Palo Alto Networks Inc. is a public company headquartered in Santa Clara, and listed on the NASDAQ exchange. According to the indictment’s allegations, Barama, 48, of Fremont, participated in an insider trading scheme in which he learned inside information about the quarterly financial performance of Palo Alto Networks before that information was released to the public and then traded in that company’s stock while that information was still confidential.

According to evidence presented at trial, Barama formerly worked as a contractor at Palo Alto Networks. During that time he met an employee who worked in the company’s information technology department. From at least October 2016 through September 2017, the employee learned confidential inside information about the company’s quarterly revenue and financial performance through his employment.

Trial evidence, according to HInds, demonstrated that the Palo Alto Networks employee traded on that confidential information himself in nominee accounts and also provided Barama with the information along with trading instructions.

Barama then used the confidential information and trading instructions to purchase Palo Alto Networks stock options. Once the company publicly announced its earnings for a prior quarter, the stock price reacted to the public disclosure and Barama’s earlier option trades promptly became highly profitable.

Barama’s trades based on confidential inside information at times resulted in profits of more than five times the amount he invested. Barama ultimately made profits of $7.3 million on his options trades based on confidential information obtained ahead of four different Palo Alto Networks earnings announcements.

The jury convicted Barama of four counts of securities fraud. For each count, Barama faces a maximum statutory sentence of 25 years in prison. The jury acquitted Barama of one count of conspiracy to commit securities fraud.

Seeborg has not yet set a sentencing hearing date for Barama. Barama remains free on bond pending his sentencing hearing.

Barama and other traders and participants in the insider trading scheme were named in enforcement actions brought by the United States Securities and Exchange Commission in 2019.


Three decades of journalism experience, as a writer and editor with Gannett, Knight-Ridder and Lee newspapers, as a business journal editor and publisher and as a weekly newspaper editor in Scotts Valley and Gilroy; with the Weeklys group since 2017. Recipient of several first-place writing and editing awards, California News Publishers Association.

Leave a Reply

Your email address will not be published. Required fields are marked *