Biology Teacher Bookie Turned Inside Trader Hit with $1 Million Ruling

A California high school biology teacher that took illicit sports wagers also dabbled in insider trading, and that pursuit will cost him close to $1 million.

Federal prosecutors are demanding Benjamin Wylam pay back $999,000 of more than $1 million he made trading Infinera Corp. (NASDAQ:INFN) stock on information that was not available to the general public. Wylam, 42, is a teacher in Santa Clara, Calif.

In turn, Wylam relayed some of the data to Naveen Sood — a client of the teacher’s bookmaking operations that were in a six-figure hole due to losing sports bets. Sood passed the information on to his friends — Marcus Bannon, Matthew Rauch, and Naresh Ramaiya — who also profited on Infinera stock.

“The SEC’s complaint further alleges that Bannon tipped Sood with material, nonpublic information concerning Bannon’s employer, Fortinet Inc.,” according to a statement issued by the commission. “As alleged in the complaint, Bannon learned in early October 2016 that Fortinet was going to unexpectedly announce preliminary negative financial results.  Bannon allegedly tipped this information to Sood, who used it to trade.  After learning the information, Sood allegedly tipped Wylam and Ramaiya, who also traded.”

Fortinet (NASDAQ:FTNT) is a California-based cybersecurity software firm with a market value of $37.57 billion.

Sports Betting Prohibited in California

Details on Wylam’s bookmaking operation are scant in the SEC statement. But it’s not unreasonable to surmise that between California having yet to approve regulated sports wagering and one of his clients — Sood — owing more than $100,000, it was a nice side hustle for the teacher.

California voters will have an opportunity to decide on sports wagering in November 2022. If that ballot initiative passes, sportsbooks will be limited to the state’s tribal casinos and racetracks in Alameda, Los Angeles, Orange, and San Diego counties.

Other Fines Pending

Wylam, Sood, Bannon, Rauch, and Ramaiya are each on the hook for some big fines stemming from the insider trading flap.

“Bannon agreed to pay a civil penalty of $281,497, Rauch agreed to pay a civil penalty of $128,230, and Ramaiya agreed to pay a civil penalty of $65,780,” according to the SEC. “Sood also consented to the entry of a final judgment and agreed to pay a civil penalty of $178,320.”

The US Attorney’s Office for the Northern District of California said it’s pursuing criminal charges against Brown, Wylam, and Sood.