Psychiatrist Repaying Insider Trading Profits

BILL POOVEY

CHATTANOOGA, Tenn. (AP) — A Chattanooga psychiatrist accused of insider trading in a complaint involving the former Covansys Corp. has agreed to pay about $770,000 in a Securities and Exchange Commission complaint.

The SEC said in a statement Monday that Dr. Sarath B. Gangavarapu agreed to pay a civil penalty of $361,762 and "his ill-gotten gains" of the same amount, plus interest of $46,408.

The SEC said Gangavarapu bought shares of the information technology company based on telephone conversations with a sister who was married to a Covansys executive officer, just before the Farmington Hills, Mich. company's purchase by Computer Sciences Corp. in April 2007.

Neither Gangavarpu, his attorney Leigh Roadman, nor a spokesman for the Falls Church, Va.-based CSC answered telephone messages seeking comment Monday.

John Sikora, assistant regional director of the SEC's office in Chicago, said in a telephone interview that the SEC "takes insider trading very seriously and I think this case reflects that."

The SEC statement said that while talks were ongoing privately about the company's plans, Gangavarapu bought more than 54,000 shares of Covansys for more than $1.4 million.