The Securities and Exchange Commission on Tuesday amended its complaint against Richard Lee, a former portfolio manager at SAC Capital Advisors who the agency charged on July 25 with insider trading, to additionally charge Sandeep Aggarwal, the tipper of confidential information to Lee.
The SEC says that Aggarwal, a sell-side analyst, tipped Lee in advance of a July 2009 public announcement about an Internet search engine partnership between Microsoft and Yahoo.
Lee purchased large amounts of Yahoo stock in the SAC Capital hedge fund that he managed as well as in his personal trading account on the basis of the inside information.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York on Tuesday announced criminal charges against Aggarwal, who lives in India but recently returned to the U.S.
Sanjay Wadhwa, senior associate director of the SEC’s New York Regional Office, said in a statement that “Rather than rely on legitimate research methods, Aggarwal obtained confidential information from a close friend at Microsoft and passed it along to Lee knowing that he would likely trade on it.”