Former Analyst Pleads Guilty To Securities Fraud For Committing Insider Trading By Front-Running Employer’s Pending Trades

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Damian Williams, the United States Attorney for the Southern District of New York, announced today that SERGEI POLEVIKOV, a former analyst employed by an asset management firm, pled guilty to one count of securities fraud in connection with his multi-year scheme to commit insider trading by misappropriating confidential information about pending trades by his former employer.  POLEVIKOV was arrested in September of this year, and pled guilty today in Manhattan federal court before U.S. District Judge Lewis J. Liman. 

U.S. Attorney Damian Williams said: “As he admitted in court today, Sergei Polevikov broke the law when he exploited material, nonpublic information to make personal trades ahead of his employer’s large institutional trades.  Polevikov now awaits sentencing for his crime, and he must also forfeit more than $8 million in illicit profit.”

According to the Information to which POLEVIKOV pled guilty, the complaint that was filed in this case, and statements made during court proceedings:

From at least in or about 2014 through in or about October 2019, POLEVIKOV was employed as a quantitative analyst at an asset management firm with headquarters in New York, New York (the “Employer Firm”).  In his role at the Employer Firm, POLEVIKOV had regular access to information regarding contemplated securities trades on behalf of the Employer Firm’s clients, which included investment companies.  During the period charged in the Complaint, POLEVIKOV engaged in a front-running scheme to misappropriate confidential, material, nonpublic information about the securities trade orders of the Employer Firm on behalf of its clients in order to engage in short-term personal securities trading in a brokerage account opened in his wife’s name.  POLEVIKOV’s trading scheme was designed to take advantage of relatively small price movements in a company’s stock that followed from large securities orders executed by the Employer Firm on behalf of its clients.  In total, POLEVIKOV’s scheme yielded more than $8.5 million in illicit profits.     

As part of his plea agreement, POLEVIKOV has agreed to forfeit $8,564,977 on or before April 1, 2022. 

POLEVIKOV is scheduled to be sentenced by Judge Liman on April 12, 2022.

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Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the Securities & Exchange Commission, which brought a related civil action against POLEVIKOV.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Kiersten A. Fletcher is in charge of the prosecution.

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