SEC catches front-running schemer with sophisticated data analytics tools

Rick Steves

“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.”

SEC bans biotech visionary investor after a $17 million loot claimed by fund

The Securities and Exchange Commission has pressed fraud charges against Sean Wygovsky in connection with a long-running and lucrative front-running scheme, netting more than $3.6 million in illicit gains.

The SEC’s complaint charges Wygovsky with violating the antifraud provisions of the federal securities laws and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.

Trading at a major Canada-based asset management firm, Wygovsky repeatedly traded in his family members’ accounts held at brokerage firms in the United States ahead of large trades that were executed on the same days of his employer’s advisory clients.

Then, typically before the client accounts completed their executions, Wygovsky allegedly closed out the just-established positions in his relatives’ accounts, nearly always at a profit.

The front-running endured from approximately January 2015 through at least April 2021 on over 600 occasions, according to the financial watchdog.

Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit, said: “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.

“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 U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Wygovsky in a parallel action.

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