Calif. Man Pleads Guilty For Insider Trading Of Millions At Ross Stores

Contra Costa Times (Walnut Creek, CA)

Feb. 01--DUBLIN -- A Dublin man pleaded guilty in federal court Thursday to charges related to an insider trading scheme of Ross Stores stocks that netted him at least $3.5 million in illegal profits.

Saleem M. Khan, 54, admitted to conspiracy and securities fraud charges. According to the Department of Justice, between July 2009 and to October 2012 Khan obtained private information related to the sales and financial performance of Ross Stores, which was then headquartered in Pleasanton. Khan received the information from an unnamed tipster who worked for Ross at the time.

Using the information, Khan bought and sold securities issued by Ross and traded them on the NASDAQ stock exchange. Khan was accused of sometimes trying to conceal the scheme by using the brokerage accounts of one or more other people.

In his plea agreement, Khan admitted he provided benefits to this Ross employee tipster including $130,000 and purchasing items for him or her. Khan admitted to making more than $3.5 million in profits in this scheme.

Khan was indicted in November 2017 and in his plea deal Thursday, pleaded guilty to one count of conspiracy to commit securities fraud and nine counts of securities fraud, according to the Department of Justice. A remaining count of obstruction of justice will be dismissed if he complies with the terms of the plea deal.

He faces a maximum sentence of 25 years for each count, and a $250,000 fine. Sentencing will be on June 24.

Khan was also sued in a civil case by the Securities and Exchange Commission in 2014 related to the same insider trading scheme. In September 2016, before the criminal indictment, the court ordered Khan to pay more than $15 million in penalties and a prejudgment interest. Khan agreed to settle the charges against him without admitting or denying the allegations of the civil complaint at the time.