SEC Wins Default Judgment Against Ramani in Coinbase Insider Trading Case

News | March 11, 2024 By:

On Friday, March 1, 2024, the US District Court for the Western District of Washington granted in part and denied in part a motion for default judgment against Sameer Ramani in an insider trading case brought by the Securities and Exchange Commission (SEC).

The SEC had accused Ramani, along with two others including Ramani’s friend Ishan Wahi, of engaging in insider trading related to cryptocurrency assets. Ishan Wahi, a former manager at Coinbase, was accused of providing material non-public information about upcoming crypto listings on Coinbase to Ramani and another individual in breach of his duties to Coinbase. Ramani then allegedly used this confidential information to make substantial profits by trading in the relevant crypto assets.

In its complaint, the SEC contended that Ramani had realized over $817,000 in profits from insider trades involving at least seven crypto assets based on tips received from Wahi regarding impending Coinbase listings. The SEC argued that Ramani knew or should have known the information he received from Wahi was confidential in nature. The court filings also suggested Ramani may have attempted to conceal his trading activity by using multiple trading accounts and digital wallets.

While Ramani’s co-defendants had pled guilty in a parallel criminal case and settled with the SEC, Ramani himself failed to appear or respond to the civil charges against him. As a result, the Clerk of the Court entered a default against Ramani in late October. This prompted the SEC to file a motion seeking a final default judgment.

In its ruling, the court granted the SEC’s motion for default judgment against Ramani, finding that the Eitel factors weighed in favor of the entry of default judgment. However, the Court denied one aspect of the requested relief. Specifically, the Court ordered the disgorgement of ill-gotten gains in the amount of $817,602, representing the profits Ramani realized from his insider trading. The Court also imposed a civil penalty of $1,635,204 pursuant to Section 21(d)(3) of the Exchange Act. While largely granting the SEC’s motion, the Court denied their request for prejudgment interest.

Please contact BlockTribune for access to a copy of this filing.