US accuses former Wall Street quantitative analyst of insider trading

A Wall Street sign is visible outside the New York Stock Exchange (NYSE) in New York, New York, United States on June 28, 2021. REUTERS / Andrew Kelly

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NEW YORK, Sept. 23 (Reuters) – A former Wall Street quantitative analyst was charged with insider trading on Thursday for making nearly 2,900 transactions after learning his employer would soon be making the same transactions for clients, called ” front-running ”.

The US Department of Justice said Sergei Polevikov, 48, of Port Washington, New York, generated more than $ 8.5 million in illegal profits on transactions he made from January 2014 to October 2019 via his wife’s brokerage account.

Polevikov worked for OppenheimerFunds during the alleged run, according to a public file search.

Prosecutors said his trades were designed to take advantage of small movements in stock prices he expected to occur that day after his employer filled orders from large clients.

In a related civil complaint, the United States Securities and Exchange Commission said 2,858 of Polevikov’s 2,874 overlapping trades were in the same direction as his employer’s.

Polevikov has been charged with securities fraud, wire fraud and investment company fraud.

The bond was set at $ 1.5 million during his initial appearance in Manhattan federal court on Thursday afternoon. Polevikov was arrested on Wednesday evening. Securities fraud and electronic fraud counts each carry a maximum prison sentence of 20 years.

Polevikov “violated not only the terms of her employment but also the law by exploiting non-public material information to conduct personal transactions before large institutional transactions,” US attorney Audrey Strauss said in Manhattan in a statement.

A lawyer for Polevikov did not immediately respond to a request for comment.

According to his LinkedIn page, Polevikov left OppenheimerFunds in October 2019, five months after its acquisition by Invesco Ltd (IVZ.N) of MassMutual.

He is now the Managing Director of WellAI, a Wyoming-based health and technology company that he co-founded last year.

Invesco said it has cooperated with the government’s investigation and will provide any further assistance requested by the government. WellAI did not immediately respond to requests for comment.

Report by Jonathan Stempel in New York; Editing by Matthew Lewis and Peter Cooney

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