The Securities and Exchange Commission fined junior staff auditor Nima Hedayati, an employee of Ernst & Young, $87,000 to settle charges he allegedly traded on inside information about a planned merger between EY client Lam Research Corporation and another semiconductor equipment manufacturer KLA-Tencor Corporation . According to the SEC's order, Hedayati purchased out-of-the money call options in KLA common stock in his own brokerage account as well as his fianc�e's brokerage account, and encouraged his mother to also purchase KLA shares. KLA's stock price increased nearly 20% after the merger was announced. EY has terminated Hedayati, who did not admit or deny the SEC's findings. Hedayati agreed to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies for at least five years.
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