msyhooMicrosoft has put an unidentified employee on administrative leave pending the results of an internal investigation related to charges of insider trading against a financial analyst who allegedly received advance word about the company’s Yahoo search partnership agreement in 2009. The charges are connected to the high-profile case against SAC Capital Advisors.

The Redmond company, which has not been accused of wrongdoing in the case, said in a statement, “As a company we have zero tolerance for insider trading, and we assisted the government with this investigation. We have strict policies that prohibit insider trading, and we expect our employees to adhere to them.”

The charges of conspiracy were filed against Sandeep Aggarwal, a former equity research analyst for a San Francisco-based financial services firm. Here’s a summary of the allegations against the analyst from the complaint.

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.

Lee was charged with insider trading in the broader case against SAC Capital. For more details on the Aggarwal charges, see this news release from the Manhattan U.S. Attorney’s Office. Business Insider reports that Aggarwal was working for the firm Collins Stewart at the time of the alleged insider trading.

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