Sandeep Aggarwal, co-founder and former CEO of online marketplace ShopClues.com, has been banned by the US Security and Exchange Commission (SEC) from trading, after he pleaded guilty to an insider trading charge in his previous job as an analyst at Collins Stewart in the US, as per a SEC order.
The order was issued on January 8, followed by Aggarwal's submitting of an offer of settlement which has been accepted by the SEC.
As per the SEC note, Aggarwal is 'barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognised statistical rating organisation'.
He is also barred from participating in any offering of a penny stock, including acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, SEC said in a note.
Aggarwal was arrested by the Federal Bureau of Investigation (FBI) in July last year on insider trading charges. Aggarwal was a Wall Street analyst prior to starting ShopClues and according to FBI, he 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 last year when he was visiting the US, and was later released on a $500,000 bond until trial.
Last November, 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.
His venture ShopClues was founded in 2011 as a managed marketplace e-tailer. It is backed by high-profile venture capital investors. Last March, 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.
After the US SEC case came to light, Sanjay Sethi, co-founder of Gurgaon-based Clues Network, which runs online marketplace ShopClues.com, has stepped in as the new CEO.
(Edited by Joby Puthuparampil Johnson)