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Sell-Side Analyst Who Passed Inside Information To SAC Employee, Who In Turn Traded On It On The Firm's Behalf (Without Steve Cohen's Knowledge Or Approbation*) Is Arrested

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Richard Lee, of the SAC Capital Lees, had a "senior internet research analyst" friend named Sandeep Aggarwal (illustrated at left), who had an unnamed friend working at Microsoft, who had material non-public information re: "a Microsoft-Yahoo partnership agreement...likely to be announced in the next two weeks." See if you can guess what happened next.

Anyway, Aggarwal was arrested yesterday. Marginally related, here's a picture of him in happier times, posing with some of the stuff you could buy from the eCommerce company he founded after his career "analyzing" things.

Sandeep Aggarwal arrested yesterday by FBI agents in San Jose, CA on insider trading charges [@NewYorkFBI]
SEC Charges Tipper of Confidential Information to S.A.C. Capital Portfolio Manager [SEC]
US v. Richard Lee, Sandeep Aggarwal [Complaint]
Sandeep Aggarwal Portrait [CNN Money]
Raising a growth round before aiming for a NASDAQ listing by 2016: The ShopClues Story [YourStory]
*Presumably. Unread emails, the immutable laws of physics, etc.
**Richard Lee also had a friend who had a friend at 3Com, because of course he did:


Doctor Who Tipped Off SAC Manager Wasn't Conspicuous About His Wealth Except When He Was Telling Strangers On Planes About All The Fancy Hotels And Limo Rides Insider Trading Afforded Him

As you may have heard, in addition to the salary he was paid by the University of Michigan, Dr. Sidney Gilman made about $100,000/year through his side-gig advising "a wide network of Wall Street traders."  That network included included Mathew Martoma, recently charged with running “the most lucrative insider trading scheme ever,” based on the information he received from Gilman, who made it a habit of leaking highly confidential information to the former SAC Capital employee. While most people that engage in fraud can't help but spend their ill-gotten gains in a flashy way that attracts unwanted attention (expensive cars, private jets, chinchilla fur coats) the Times reports that Sid Gilman's supplementary income "was not readily apparent in his lifestyle in Michigan." For instance, no second home and no bragging to his colleagues about his life on Wall Street. Still, on at least one occasion, the doctor couldn't help but let the underage girl sitting next to him on a flight home know that she was in the presence of a BSD.

The Feds Are Struggling To Understand Why Mathew Martoma Won't Just Turn On Steve Cohen Already, God Damn It

"We have been remarkably successful in convincing persons to cooperate with the government, and provide evidence to us, and in court of law," SEC director of enforcement Robert Khuzami said during a press conference the day the government went public with its charges of insider trading against former SAC Capital employee Mathew Martoma. To the untrained ear, Khuzami probably appeared to be speaking to no one in particular, just sending a general message to any would-be criminals out there that once the government got to their co-conspirators, it'd be all over. No one wants to do time, and everybody flips. To those who've been following Operations Perfect Hedge, though, and have watched the Feds' relentless pursuit of Steven A. Cohen,  it was obvious they were sending a clear message to the Big Guy: "We got ya boy, and ya goin' down." And since its track record of getting people to turn on their colleagues and in some cases, their best friends (see: Noah Freeman/Donald Longueuil, and these guys, and these guys, and this guy) really has been "remarkably successful," and since Martoma has a wife and two young kids and his whole life ahead of him, Khuzami and Co. probably assumed they had this one in the bag. But not so.