Shopclues, the rising star of marketplace e-commerce in India, saw a major setback yesterday. The company’s CEO, Sandeep Aggarwal, was arrested in USA yesterday on alleged charges of insider trading. The arrest was made by FBI in San Jose, California yesterday.
For the sellers who must be bewildered, here is a background:
- Before starting Shopclues (which is a company registered in USA), Sandeep Aggarwal was a Wall Street analyst. He used to research stocks of technology companies and his research was published in various publications.
- Allegedly, he received some information from a Microsoft employee about a possible deal between Microsoft & Yahoo.
- He allegedly, passed this information to a fund manager called Richard Lee who purchase thousands of shares of the company just before the news broke out.
- Richard Lee recently pleaded guilty under charges of insider trading and allegedly tipped off FBI on Aggarwal.
Although, it is unclear if Aggarwal has been found decisively guilty, according to the US government press release securities fraud could lead to a maximum of 5 years imprisonment and $250,000 in fines.
For the sellers, this really puts the future of Shopclues under question. While Aggarwal prepares for a seemingly long drawn legal battle, all eyes will be on second in command – Sanjay Sethi.
Sanjay is the co-founder of Shopclues and holds the position of Corporate Vice President, Products. This means most of the technology and process enhancements that the sellers experience were headed by Sanjay.
Should we express our support to the Shopclues team (which has built a good business in a short time and helped all sellers) or should we suspect the company now? Share your views…