The Securities and Exchange Commission has charged a trader at a Canadian-based asset management firm in an extensive front-running scheme that netted family members close to $4 million.
For more than six years Sean Wygovsky allegedly traded in his family members’ accounts at brokerage firms in the United States before large trades which were executed on the same days in the accounts of his employer’s advisory clients.
On more than 600 occasions he allegedly bought or sold a stock for a relative’s account either before or during the period when the client account executed a large order on the same side. The process usually concluded with Wygovsky supposedly closing out the just established positions in his relatives’ accounts, most times at a profit.
“As alleged in our complaint, Wygovsky abused his position and his employer’s trust by front-running the very securities transactions that he was tasked with executing for his employer’s advisory clients,” said Joseph G. Sansone, chief of the SEC Enforcement Division’s Market Abuse Unit. “Thanks to the SEC’s development and use of sophisticated data analytics tools, Wygovsky’s alleged scheme was uncovered and his efforts to evade detection by using family members’ accounts failed.”
The SEC charged Wygovsky with violating the antifraud provisions of the federal securities laws and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief. The U.S. Attorney’s Office for the Southern District of New York has brought criminal charges against Wygovsky.