The Securities and Exchange Commission charged former Snap Inc. engineer Mohammed "Mo" Pithapurwala with unlawfully tipping his brother-in-law, Ammar Kutiyanawalla, who purchased Snap options on the basis of material nonpublic information ahead of the company's February 6, 2018 earnings announcement.

According to the SEC's complaint, after gaining access to pre-release earnings information in January 2018, Pithapurwala asked Ammar to purchase Snap securities because he was prohibited from doing so himself during a company-imposed trading blackout period. Pithapurwala and Ammar allegedly agreed to share the profits from Ammar's Snap trading. The complaint alleges that Pithapurwala and his wife, Alifiya Kutiyanawalla, who is Ammar's sister, funded the trading by transferring $20,000 to Ammar through intermediaries. Allegedly, on February 5 and 6, 2018, Ammar purchased more than $24,000 of risky Snap call options, despite having never previously purchased any Snap securities. According to the complaint, after markets closed on February 6, Snap announced results that beat expectations, and the price of its common stock closed up 48% the next day. The complaint alleges that Ammar sold all of the Snap options on February 7 and 8, realizing profits of more than $261,000.

The SEC's complaint charges Pithapurwala and Ammar with violating the antifraud provisions of Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Alifiya with aiding and abetting their violations. The complaint seeks a permanent injunction, disgorgement with prejudgment interest from Ammar, and civil penalties against all defendants.

The SEC's investigation was conducted by Colleen M. Keating and supervised by Diana K. Tani of the Los Angeles Regional Office. The litigation will be led by Lynn M. Dean and supervised by Amy J. Longo. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.