Sandeep Aggarwal, founder and former CEO of online marketplace ShopClues, has pleaded guilty to an insider trading charge in his previous job as an analyst at Collins Stewart in the US. According to a report by Bloomberg, Aggarwal pleaded guilty to one count each of conspiracy and securities fraud in his testimony to a US federal court judge.
"I did this to improve my standing as an analyst and to increase revenue for my firm. I know what I did was wrong and I'm very sorry for my conduct," Aggarwal told US Magistrate Judge Ronald Ellis, as per the report which said Aggarwal is liable for as much as 25 years in jail and could be deported back to India, if sentenced.
Aggarwal was arrested by the Federal Bureau of Investigation (FBI) in July this year on insider trading charges. Aggarwal was a Wall Street analyst prior to starting ShopClues and according to FBI, he allegedly tipped off Richard Lee, a portfolio manager at hedge fund SAC Capital about a pending deal between Microsoft and Yahoo. He was arrested in San Jose earlier this year when he was visiting the US. He was later released on a $500,000 bond until trial.
His venture ShopClues was founded in 2011 as a managed marketplace e-tailer. It is backed by high-profile venture capital investors. In March this year, it raised a Series B round of $10 million from Nexus Venture Partners, Helion Venture Partners and Netprice.com, a Japanese business group based in Tokyo.
Earlier, Nexus Venture Partners led a $4 million Series A round for ShopClues that also saw the participation of an unnamed Asia-based VC investor.
Last month, co-founder Sanjay Sethi took over as the CEO of the company given the absence of Aggarwal due to his pending court case in the US.
(Edited by Joby Puthuparampil Johnson)