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ARTICLE · 28 SEPTEMBER 2021

SEC Charges Quantitative Analyst With $8.5M Front-Running Scheme

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The SEC charged a quantitative analyst with a years-long scheme to front-run securities trades entered by two investment advisers that employed him.

United StatesCorporate/Commercial Law
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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The SEC charged a quantitative analyst with a years-long scheme to front-run securities trades entered by two investment advisers that employed him.

In a Complaint filed in the U.S. District Court for the Southern District of New York, the SEC alleged that the analyst used material non-public information to trade ahead of approximately 3,000 trades executed by the firms for their clients by making the front-running trades in his wife's brokerage account. The SEC alleged that the analyst had access to the firms' order and execution management ("OEM") system and used information on pending large trades in the OEM system to trade in the same direction as the firms' clients, and then close his position the same day to capitalize on the price movements caused by the large trades.

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