Sivannarayana Barama, a former Palo Alto Networks engineer, urged the Ninth Circuit on Monday to overturn his securities fraud conviction and 18-month prison sentence. Barama argued that his lack of a personal relationship with the tipper undermines the evidence that he traded on insider information, calling into question the legitimacy of his December 2022 conviction for profiting nearly $7 million through illegal stock trades.
Allegations and Trial Background
Barama’s conviction stems from insider trading involving confidential revenue data from Palo Alto Networks, obtained by Janardhan Nellore, an IT employee at the company. Prosecutors alleged that between 2015 and 2018, Nellore used his administrative access to steal nonpublic information, trading on it himself and sharing it with Barama, who also reaped significant gains.
Nellore pled guilty to the scheme and cooperated with authorities, testifying against Barama. Jurors convicted Barama on four securities fraud counts but acquitted him of conspiracy.
Barama’s Appeal Arguments
Representing Barama, Karen Lee Landau argued that the evidence failed to prove a personal relationship between Barama and Nellore, a key component of insider trading liability. While they communicated via text and WhatsApp and occasionally had tea when working together, Landau noted that:
- The two did not socialize outside work after Barama left Palo Alto Networks in 2016.
- Nellore testified that he did not consider Barama a friend.
“They weren’t friends,” Landau said. “They didn’t socialize.”