In June 2022, Jai Sondhi didn’t walk into Canoo’s weekly leadership meeting as just another employee sitting around the conference table. The licensed Texas CPA was senior director of internal audit and controls at the electric vehicle company, a trust-based position. His position gave him access to some of the most closely held financial and operating information at Canoo, including confidential discussions that could impact the company’s stock price. The U.S. Securities and Exchange Commission says that trust was violated when Sondhi used insider information about a big corporate deal to make trades that earned him nearly $55,000 in illegal profits before the rest of the market knew what was coming.
The SEC case revolves around one of the biggest announcements in Canoo’s history. In the summer of 2022, Walmart was in the final stages of negotiating with the struggling electric vehicle manufacturer in a partnership that was expected to involve the purchase of thousands of electric delivery vehicles. The deal could have been a game-changer for investor confidence in Canoo, then dependent on landing big commercial customers and proving that its vehicles had tangible market demand. But the negotiations were secret until the deal was made public.
The SEC’s civil complaint alleges that Sondhi first heard about the pending transaction at internal leadership meetings in June 2022. As a senior finance executive with responsibility for internal audit and controls, he attended periodic meetings with Canoo’s chief financial officer where executives discussed material nonpublic information, including the status of negotiations with the unnamed retailer later revealed to be Walmart. The complaint alleges those meetings signaled the deal was near completion and the public announcement was imminent.
But federal regulators say Sondhi didn’t wait for the news to be made public. Instead, he bought about 7,000 shares of Canoo stock and hundreds of call option contracts — financial instruments that become much more valuable when a stock price jumps sharply — during the period from late June to early July 2022. The SEC said those purchases violated both federal securities laws and Canoo’s own policies against insider trading, which barred employees from trading while in possession of material nonpublic information.
And then July 12, 2022 came. “Walmart will purchase at least 4,500 electric delivery vehicles with an option for an additional 10,000 later, Canoo said in a statement. The investors reacted right away. Shares of Canoo jumped more than 50 percent in a single trading session, as the news was a major boost to the market sentiment around the company. Sondhi sold a big piece of his holdings quickly but kept other shares that had already appreciated significantly in value, the SEC said, resulting in total ill-gotten gains of $54,965.23. Those included some $43,271 in realized gains and nearly $11,694 in unrealized gains.
The dollar amount was rather small compared to many high-profile insider trading cases, but regulators emphasized that the size of the profit has never been the only issue. Insider trading undermines the foundation of fair financial markets by allowing individuals with insider knowledge of a company to profit at the expense of ordinary investors who do not have access to the same material information. The SEC has long held that the integrity of the market derives from all investors playing on a level field, rather than from the perspective of secretly leveraging knowledge obtained through positions of trust.
The enforcement action came almost four years after the trades were made. On April 28, 2026, the SEC filed a civil complaint against Sondhi in federal court in the Northern District of Texas, and announced a settlement to resolve the matter. Without admitting or denying the SEC’s allegations, Sondhi consented to the entry of a final judgment permanently enjoining him from violating the federal anti-fraud provisions governing insider trading. The settlement required him to forfeit the profits that regulators said were illegal, pay prejudgment interest and pay a civil penalty equal to the amount of his gains. The financial resolution totaled over $125,000.
The fallout was more than the financial penalties. In a separate administrative case, the SEC suspended Sondhi from practicing or appearing before the Commission as an accountant under Rule 102(e), a major professional sanction for a certified public accountant whose career had been built on financial reporting, internal controls and corporate governance. The Commission decided the misconduct described in the civil case merited limiting for the public interest his ability to practice before the agency.
Court filings show that Sondhi settled the issue by consent, not litigation. Notably, the settlement did not include an admission of wrongdoing, a common feature of many SEC civil enforcement actions. Rather, he stipulated to the judgment, neither admitting nor denying the Commission’s findings, except that he stipulated to the court’s jurisdiction and the completion of certain procedural matters.
According to public court records, no criminal charges were filed related to the trades, and the matter seems to have been addressed solely through civil enforcement.
The insider trading allegations came against the backdrop of Canoo’s own rocky corporate history. Once hyped as an ambitious electric vehicle startup that was going to take on the established automakers, the company spent years mired in production delays, mounting financial losses, executive turnover and ongoing questions about its long-term viability. Canoo’s collaboration with Walmart was arguably its biggest commercial success so far, but it was not enough to save the company. Canoo later went bankrupt in a stunning turnaround for a company that had been a darling of investor interest during the electric vehicle investment boom.
The SEC’s complaint also underscores why expectations are particularly high for insiders in finance, accounting and audit functions. Professionals working in internal audit are specifically entrusted to protect corporate governance, oversee compliance and help avoid misconduct within an organization, unlike many other employees. Regulators said Sondhi’s role was said to have given him access to highly sensitive information but also an increased duty not to abuse that access for personal financial benefit.
Sondhi, 37, was the Senior Director of Internal Audit and Controls for Canoo from February through December 2022, according to publicly available information. Beyond the SEC proceedings, little verified information is available regarding his current employment or professional activities since the settlement. The public record available is dominated by the enforcement action itself and does not indicate any additional civil lawsuits, criminal prosecutions or parallel regulatory investigations in relation to the trading activity.
The case is yet another reminder that insider trading investigations aren’t the sole province of chief executives or billionaire investors. Regulators are increasingly focusing on employees within an organization who gain access to sensitive business information through finance, legal, compliance, accounting or operational roles. In many ways those employees are in positions where trust is as important as authority.
This story is not simply about one executive, one trade or one settlement for investors. Markets that are open to the public only function if people believe that prices are based on information that is available to everyone simultaneously. Every insider trading case tests that principle, whether the profits are in the thousands of dollars or the millions. The SEC continues to send a simple message by taking action against individuals at all levels of corporate leadership: confidential information is a corporate asset, not a personal investment opportunity, and those who are entrusted with it risk far more than financial penalties if they think otherwise.
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