ShopClues.com’s founder Sandeep Aggarwal has been arrested by FBI agents in San Jose. Aggarwal was a former Wall Street analyst and has been arrested on insider trading charges, as per tweets posted by FBI New York Bureau. The development has been first reported by iamwire.

Sandeep is alleged of tipping Richard Lee, a SAC Capital portfolio manager about a pending deal between Yahoo and Microsoft in 2009. FBI had already accused hedge fund SAC capital for charges of insider trading by its employees.

Aggarwal, 40, is charged with one count of conspiracy to commit securities fraud, and one count of conspiracy to commit wire fraud. He worked as an analyst at Collins Stewart when he was allegedly passing the non-public information along, FINRA records show.

A release from US Attorney stated “On the evening of July 9, 2009, AGGARWAL learned from a friend who was an employee of Microsoft that discussions about the Partnership had recommenced and that a transaction was likely within the next few weeks. The next day, AGGARWAL provided information about the Partnership to at least two different hedge funds, including to Richard Lee, then a portfolio manager at SAC Capital Advisors LP.”

On July 10, 2009, Aggarwal told Lee, in substance, that he had heard from a source – whom Aggarwal described as “a senior guy at Microsoft” – that (a) senior Yahoo executives had been meeting with senior Microsoft executives at Microsoft’s offices; (b) senior Microsoft executives were making requests for information that suggested to the sources that a deal was likely to be completed soon; (c) the success of Microsoft’s Bing search engine had caused Yahoo to move closer to Microsoft’s offer; and (d) it was likely that the deal could be announced within the next two weeks. Thereafter, Lee’s hedge fund purchased several hundred thousand shares of Yahoo stock, and Lee purchased 25,000 shares of Yahoo stock in his personal account.

Last week, U.S. prosecutors said in a federal indictment that Lee pleaded guilty to insider trading charges. U.S. prosecutors said that Lee received non-public information in July 2009 about confidential talks between Yahoo! and Microsoft.

As per American insider trading law, the first-time offenders are eligible to receive probation rather than incarceration and Sandeep might have to pay the penalty ‘related to the amount of profit’ that can be proved against him. But according to a Bloomberg report Sandeep might face as long as 25 years in prison if convicted on the charges against him.

Sandeep founded online marketplace Shopclues.com in India in November with an initial capital of USD 2 million from unknown foreign angel investors. The platform has raised USD 15 mn in funding and  its investors include Helion Venture Partners, Nexus Partners, Teruhide Sato, CEO of Netprice.com, a Japanese Internet company.