Feds Charge Two More In Hedge Fund Fiasco

sandeep-aggarwal-1New York (HedgeCo.Net) – In the latest news regarding Stephen Cohen’s embattled hedge fund SAC Capital, analyst Sandeep Aggarwal and portfolio manager Richard Lee have been charged with insider trading.

According to the SEC complaint filed in federal court in Manhattan, Aggarwal covered both Microsoft and Yahoo for his research firm and regularly received periodic updates from his inside source at Microsoft. Upon learning that Microsoft and Yahoo were potentially within two weeks of finalizing a deal, Aggarwal shared very specific details with Lee. Lee then purchased large amounts of Yahoo stock in the 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 Attorney’s Office announced criminal charges against Aggarwal, who lives in India but recently returned to the U.S.  He was arrested in San Jose, California.

Six SAC employees have already been criminally charged with insider trading, and two of them have pleaded guilty. A SAC affiliate has agreed to pay $615 million to settle SEC charges. FBI Assistant Director George Venizelos said: “SAC Capital and its management fostered a culture of permissiveness. SAC not only tolerated cheating, it encouraged it.” Cohen himself has taken the 5th, declining to testify before a grand jury.

Alex Akesson
Editor for HedgeCo.net
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