Tech mogul Andy Bechtolsheim will pay a nearly $1mn penalty to settle insider trading charges filed by the U.S. Securities and Exchange Commission (SEC). Bechtolsheim will also be barred from serving as an officer or director at a public company for five years.

Bechtolsheim co-founded Sun Microsystems (acquired by Oracle) and Arista Networks, a computer networking company with a market value of over $90bn. He’s also famous for his early $100k investment in tech giant Google, which landed him a $1bn+ windfall.

The SEC alleged that Bechtolsheim bought shares in Acacia Communications, a networking company, after learning of an imminent acquisition by tech giant Cisco. The information came from a longtime business associate who asked Bechtolsheim whether his company (Arista) should make a rival bid for Acacia. Bechtolsheim and the associate were bound by a non-disclosure agreement, the SEC said.

According to the SEC, Bechtolsheim traded Acacia options in the brokerage accounts of both a close relative and an unnamed associate on July 8, 2019. A day after, Cisco announced an agreement to acquire Acacia, netting the accounts $416k in profits.

• Bechtolsheim settled without admitting or denying the allegations. He’ll pay a $924k penalty and be barred from serving as a public company officer or director for five years. The settlement is subject to court approval.

Bechtolsheim currently holds a board seat at Arista, which he’s about to give up because of his five-year public company ban. According to a 2023 SEC filing, he holds 14% of Arista’s shares directly or through a family trust. At Arista’s current share price, that stake is valued at $13bn.

Bechtolsheim commands a personal net worth of $18bn, according to the Bloomberg Billionaires Index.

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