Andy Bechtolsheim, a co-founder of Sun Microsystems and Arista Networks, will be barred from serving as an executive or public company board member for five years as part of an insider trading settlement with the Securities and Exchange Commission, said a report. Arista stock fell amid the news on Tuesday.
According to a Bloomberg report, the alleged misconduct involved trading on Cisco Systems' offer to buy Acacia Communications Inc. in 2019. In settling the suit, Bechtolsheim did not admit to or deny the SEC's allegations, Bloomberg said. He will also pay a $923,740 fine.
Arista Issues Statement
Arista Chief Executive Jayshree Ullal is chairman of the company's board.
Bechtolsheim serves on the board and is the company's "chief architect" responsible for advanced artificial intelligence, silicon and optics initiatives.
In a statement, Arista said: "Andy Bechtolsheim serves in a non-executive role as Arista's founder and chief architect. While the SEC announcement did not involve any trading in Arista securities, Arista takes compliance to the company's code of conduct and insider trading policy seriously. Arista will respond appropriately to the situation."
Arista Stock Jumps Amid AI Buzz
On the stock market today, Arista stock dipped 0.4% to 304.16. ANET stock had surged 29% in 2024 as of Monday's market close.
In addition, Arista sells computer network switches that speed up communications among racks of computer servers packed into "hyperscale" data centers. These internet data centers are designed to ratchet up computing horsepower when demand surges.
Similar to chipmaker Nvidia, Arista has been viewed as a play on artificial intelligence investments by technology companies and cloud computing giants. Amid the rise of generative AI, internet data centers will need more computing power and network bandwidth.
Meanwhile, Arista's biggest customers are Facebook-parent Meta Platforms and Microsoft.
A rival of Cisco Systems, Arista has been gaining ground in the so-called enterprise market — large companies, government agencies and educational institutions.
Arista stock ranks No. 11 in the IBD 50 roster of growth stocks. Goldman Sachs on March 21 raised its price target on ANET stock to 356 from 313.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
