Former Analyst Sentenced To 33 Months In Prison For Committing Insider Trading Through Front-Running

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SERGEI POLEVIKOV, a former quantitative analyst, was sentenced late yesterday to 33 months in prison by United States District Judge Lewis J. Liman.  POLEVIKOV pled guilty on December 15, 2021 for his role in a scheme to misappropriate confidential information about pending trades by his former employer, an investment adviser, on behalf of its investment company clients. 

According to the allegations in the Complaint, the Information to which POELVIKOV pled guilty, and statements made during court proceedings:

From at least in or about 2014 through in or about October 2019, SERGEI 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 scheme was designed to profit by executing trades that take advantage of relatively small price movements in a company’s stock that follow 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.     

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In addition to his prison sentence, POLEVIKOV, 48, of Port Washington, New York, was ordered to pay forfeiture in the amount of $8,564,977 and a fine of $10,000.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams further thanked the U.S. Securities and Exchange Commission for its assistance and cooperation in this investigation. 

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.