SEC v. Richard Lee and Sandeep Aggarwal, Case No. 13-cv-5185 RMB (S.D.N.Y.). On July 30, 2013, the SEC announced it amended the complaint filed last week against S.A.C.
portfolio manager Richard Lee to add charges that Sandeep Aggarwal tipped Lee. According to the SEC, Aggarwal learned confidential details about negotiations on a Microsoft-Yahoo deal from a friend who worked at Microsoft. Aggarwal tipped Lee the next day. When the information was publicly reported later, Yahoo’s stock price rose significantly giving Lee and S.A.C. Capital substantial profits from Yahoo stock Lee purchased after getting the tip from Aggarwal. The SEC alleges that Aggarwal covered both Microsoft and Yahoo for his research firm and had an inside source at Microsoft. The insider source fed him the details on the Microsoft-Yahoo deal which he immediately shared with Lee. The SEC charged Aggarwal and Lee with violating Section 10(b) of the Exchange Act and Rule 10b-5. The SEC seeks disgorgement, civil monetary penalties and injunctive relief.
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