NEW YORK (TIP): Sandeep Aggarwal, 40, a former analyst for San Franciscobased Caris & Co., who was arrested by FBI agents Monday, July 29, at his home in San Jose, California, was released on $500,000 bail in federal court Tuesday, July 30according to San Jose Mercury News. He has been charged with providing insider information about a deal between Microsoft and Yahoo to a prominent hedge fund.

He is scheduled to appear before a New York court Friday, August 2. Aggarwal, who also has a home in Gurgaon, in India‘s Haryana province, is accused of leveraging his tech industry contacts and then providing confidential insider information about a 2009 advertising and Internet search agreement between Microsoft and Yahoo to SAC Capital Advisors and a second unidentified hedge fund that same year.

Announcing conspiracy charges against Aggarwal, Manhattan’s IndianAmerican US attorney Preet Bharara said: “As alleged, Sandeep Aggarwal leveraged his contacts in the technology industry to obtain an illegal edge in the form of inside information about a highly anticipated development, and then lied about his criminal conduct.” According to the complaint unsealed in Manhattan federal court, 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 the success of Microsoft’s Bing search engine had caused Yahoo to move closer to Microsoft’s offer and 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, it alleged. Aggarwal is charged with one count each of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison, and conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. Richard Lee pled guilty July 23, to a criminal information charging him with one count of conspiracy and one count of securities fraud in connection with insider trading between April 2009 through 2010, while he was employed by SAC Capital Advisors LP.

Mercury News said July 17 Aggarwal sent an email to it saying that he had moved to India 20 months earlier to create India’s first and largest managed marketplace called ShopClues.com. “We are currently the fastest growing E-Commerce company in India,” Aggarwal wrote to the paper. “We have a total of 360 employees and perhaps the strongest team executing on the ground in India.”