Alleged tipster arrested in NY hedge fund case
Jul 30, 2013, 5:50 PM
NEW YORK (AP) – A California financial analyst provided inside information about a blockbuster deal between Microsoft and Yahoo to a portfolio manager at a hedge fund that’s become the target of a sweeping white-collar investigation, authorities said Tuesday.
Federal prosecutors in New York announced the securities fraud charges against Sandeep Aggarwal a day after he was arrested in San Jose, Calif. There was no immediate response to a phone message left Tuesday with his attorney.
The arrest marked the latest development in the case against SAC Capital. Last week, prosecutors brought criminal charges against the firm after the Securities and Exchange Commission sought its own sanctions.
SAC Capital’s billionaire founder, Steven Cohen, hasn’t been charged and he’s repeatedly denied any wrongdoing. But prosecutors said last week that one of his portfolio managers, Richard Lee, pleaded guilty on July 10 and is cooperating with the probe.
A criminal complaint unsealed Tuesday alleges that wiretap evidence shows that Aggarwal gave Lee inside information in 2009 about a pending search-advertising partnership between Microsoft and Yahoo.
In one conversation, Aggarwal told Lee that he had spoken to “a senior guy at Microsoft” who had been “very, very accurate in the past in terms of … telling me what’s going on,” according to the complaint.
Lee used the tip to purchase several hundred thousand shares of Yahoo stock for his hedge fund, and 25,000 shares for his personal account, prosecutors said.
Aggarwal, 40, faces up to 20 years in prison if convicted of conspiracy to commit securities fraud. The term could be much lower under federal sentencing guidelines.
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