Canadian Asset Manager Charged With $3.6 Million Scheme Frontrunning His Firm’s Trades

A Canadian trader named Sean Wygovsky was charged with insider trading by a federal court in New York on Friday. Wygovsky is alleged to have reaped $3.6 million by stealing confidential information to front-run his firm’s trades. 

The firm wasn’t identified by the government or by Bloomberg, who reported the charges on Friday.

Using the accounts of close relatives and family, he attempted to conceal his activity. The relatives and family then kicked back “at least hundreds of thousands of dollars” in illegal trading profits, the government alleges.

In an official DOJ release, Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Sean Wygovsky illegally exploited his access to his employer firm’s yet-to-be-executed trade orders to make numerous trades in anticipation of the bump or dip the firm’s buying or selling would cause.  To conceal the scheme, Wygovsky allegedly made his front running trades through brokerage accounts of certain of his relatives.  As alleged, Wygovsky made or directed over 700 timely transactions that netted him more than $3.6 million in illegal profits.  Now Sean Wygovsky is in custody and facing serious criminal charges.”

FBI Assistant Director William F. Sweeney Jr. said: “Over the course of several years, as alleged, Wygovsky made hundreds of short-term trades based on inside information that ultimately reaped more than $3 million in profits. Schemes like the one alleged here grossly affect the integrity of our financial markets and remain a top priority for our financial fraud investigative teams.”

Wygovsky was arrested in Austin, Texas and is expected to appear in federal court in Texas later on Friday. 

In addition to facing criminal charges, he is also facing a civil suit by the Securities and Exchange Commission based on similar allegations. 

He was employed by his firm since 2013 and has been charged with securities fraud and wire fraud, both of which carry a maximum of 20 years in prison, if a conviction is reached. The Employer Firm is an asset management firm based in Toronto, Canada, with at least approximately $19 billion in assets under management, the DOJ said in its press release. 

Traders on FinTwit pointed out that his LinkedIn appears to show he was employed at Polar Asset Management Partners:

One of the biggest investors in the #PotStocks space in Polar Asset Management.

They could be in some big big trouble here for allowing front running. pic.twitter.com/7CltHbwkzu

— Betting Bruiser (@BettingBruiser) July 2, 2021