FBI arrests Shopclues founder Sandeep Aggarwal

Sandeep Aggarwal, who worked as an analyst covering

technology stocks before moving to India to start his own internet company Shopclues.com, was arrested on Monday by FBI agents in San Jose while visiting the United States. He made his initial appearance in San Francisco Federal court on Tuesday, charged with conspiracy to commit securities fraud and wire fraud related to insider trading. Aggarwal was allegedly tipping Richard Lee, a SAC Capital portfolio manager about a pending deal between Yahoo and Microsoft in 2009.

In 2009, he worked as an analyst in Collins Stewart and was covering both Microsoft and Yahoo for his research firm. According to a SEC release, he was receiving regular updates from his sources in Microsoft and passed on very specific information to Lee over a phone call after knowing the upcoming Microsoft – Yahoo deal.

US attorney has already charge SAC Capital which has about 14 billion dollars (Rs 85,092 crores) under management about repeatedly taking information related to public companies and turning it into trading profits, the case which has now even accused Aggarwal.

According to American insider trading law, first-time offenders are eligible to receive probation rather than incarceration and Aggarwal might have to pay the penalty ‘related to the amount of profit’ that can be proved against him. But according to detailed report on the case by Bloomberg, he might even face as long as 25 years in prison if convicted on the charges against him.

Shopclues.com was launched in July 2011 by Aggarwal with two co-founders Sanjay Sethi and Mrinal Chatterjee.