SEC Obtains Final Judgment Against Former Research Analyst Who Tipped Hedge Fund Portfolio Manager

Litigation Release No. 24743 / February 20, 2020

Securities and Exchange Commission v. Richard Lee, et al., No. 13-cv-05185 (S.D.N.Y. filed July 23, 2013)

On February 18, 2020, a federal district court in New York entered a final consent judgment against Sandeep Aggarwal, a former research analyst at a registered broker dealer and investment research firm. The SEC previously charged Aggarwal with insider trading for tipping Richard Lee, a portfolio manager at former hedge fund advisory firm S.A.C. Capital Advisors L.P.

The SEC filed its action in July 2013, alleging that Aggarwal tipped Lee in advance of the public announcement of an internet search engine partnership between two technology companies. Lee's trading enabled the S.A.C. Capital hedge fund that Lee managed to generate more than $350,000 in illegal profits.  Lee also traded in his personal securities account on the nonpublic information he received from Aggarwal.

The U.S. District Court for the Southern District of New York entered a final judgment on consent against Aggarwal. The final judgment enjoins Aggarwal from future violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and orders Aggarwal to pay a civil penalty of $32,429. The court entered a final judgment on November 21, 2019 against Lee.

The SEC's litigation was led by Victor Suthammanont and Thomas P. Smith, Jr., and was supervised by Sanjay Wadhwa.