An Indian internet analyst Sandeep Aggarwal has pleaded guilty here to insider trading charges for his involvement in sharing confidential information about technology companies Microsoft Corp and Yahoo, with Manhattan's top India-born federal prosecutor Preet Bharara leading the charge.
Sandeep Aggarwal, a Gurgaon resident, faces up to 25 years in prison and over USD 5 million in fine.
Sandeep Aggarwal, 40, was arrested in connection with the insider trading scheme in July this year and following a cooperation agreement, pleaded guilty on Friday before US Magistrate Judge Ronald Ellis in Manhattan federal court to one count of conspiracy to commit securities fraud and one count of securities fraud.
Sandeep Aggarwal's guilty plea was announced by Preet Bharara who has led a massive government crackdown on insider trading on Wall Street, netting several high profile executives including Indian-American former Goldman Sachs director Rajat Gupta and former billionaire hedge fund founder Raj Rajaratnam.
The latest feather in Preet Bharara's prosecutor cap is guilty pleas on insider trading charges by Steven Cohen-led hedge funds SAC Capital Advisors.
Preet Bharara said the investigation into Sandeep Aggarwal's conduct is "continuing".
Sandeep Aggarwal, a former equity research analyst for a San Francisco-based financial services firm, faces a maximum sentence of five years in prison and a fine of USD 250,000 for the conspiracy charge. The securities fraud count carries a maximum jail term of 20 years and USD 5 million in fine.
Sandeep Aggarwal will be sentenced in May next year before US District Judge Colleen McMahon.
According to the superseding information and court documents, Sandeep Aggarwal was involved in a scheme from April 2008 to March 2010 to disclose inside information concerning a strategic partnership between Microsoft and Yahoo.
Sandeep Aggarwal had several discussions with one of his friends, who was an executive in Microsoft's internet search business, about the likelihood of a partnership between Microsoft and Yahoo.
Two senior sales executives at the Sandeep Aggarwal's firm also arranged meetings and telephone calls between him and the firm's clients to facilitate transmission of information Aggarwal had learnt about the status of the partnership.
On one occasion in July 2009, Sandeep Aggarwal learned from his friend at Microsoft that discussions about the partnership with Yahoo had recommenced and that a transaction was likely within the next few weeks.
Aggarwal shared this inside information with senior sales executives at his firm who then arranged for him to provide the confidential information to representatives of certain hedge fund clients of the firm.
One of the representatives to whom Sandeep Aggarwal provided