In the case involving former Coinbase product manager Ishan Wahi and co-defendants, Judge Tana Lin partially granted the United States Securities and Exchange Commission’s (SEC) request for a default judgment against defendant Sameer Ramani. Ramani, who allegedly fled the United States and failed to respond to court summonses, faced SEC’s demands for a permanent injunction, civil penalties, and disgorgement.
The SEC accused Ishan Wahi and his brother Nikhil of insider trading and wire fraud, specifically related to trades made with tokens slated for listing on Coinbase after Ishan Wahi shared the exchange’s plans with associates. While Lin agreed to the SEC’s injunction against Ramani, she did not order prejudgment interest on disgorged funds. The SEC claimed that nine of the tokens invested in by Nikhil Wahi and Ramani were securities.
Lin accepted the SEC’s argument that the tokens traded by Ramani were offered and sold as investment contracts, hence classified as securities. However, some legal experts argue that Lin misinterpreted the core holding of the SEC v. W.J. Howey Co. case, as she did not mention the requirement of a “contract, transaction, or scheme” for an investment contract to exist.
Ishan Wahi initially pleaded not guilty but later changed his plea to guilty in a deal with the SEC, resulting in a two-year prison sentence. His brother Nikhil received a 10-month sentence. Ramani’s defense counsel and contact information listed in the order did not respond to inquiries by publication time.
