BRIELLE – A former partner at a New Jersey broker-dealer firm has been indicted on charged stemming from an insider trading scheme that gained millions of dollars in illegal trading profits, state officials said.
Christopher Matthaei, 44, of Brielle, was indicted by a federal grand jury with two counts of securities fraud conspiracy (Counts One and Nine) and seven counts of securities fraud (Counts Two through Eight).
Matthaei was a partner and senior salesperson at a Charlotte, North Carolina-based broker-dealer with offices in Red Bank, NJ.
Between May 2020 and February 2021, Matthaei illegally traded on material, non-public information (MNPI) that he received from Sean Wygovsky, a conspirator and friend who worked at a large Canadian asset management firm, according to officials.
“The MNPI pertained to Special Purpose Acquisition Companies (SPACs) that were engaged in confidential merger negotiations and shared information with the asset management firm as a potential investor in the SPAC deals,” officials said. “Wygovsky received this MNPI every time a SPAC was placed on his firm’s confidential restricted list, meaning that the firm’s employees were prohibited from buying or selling the SPACs’ securities, either personally or via another person or third party.”
Despite knowing about these trading restrictions, Wygovsky shared the MNPI with Matthaei. Matthaei then purchased securities in the SPACs using his personal brokerage accounts.
They continued to engage in the insider trading scheme in June 2020, when Matthaei paid for a private plane and extended trip with Wygovsky and their families to a luxury resort on the island of St. Barts.
Matthaei has made about $3.4 million in illegal trading profits from the insider trading scheme, officials said.
Wygovsky pleaded guilty on May 25, 2020, before U.S. District Judge Georgette Castner to an information charging him with securities fraud in connection with the insider trading scheme.
Matthaei faces a maximum potential penalty of five years in prison and a $250,000 fine for the securities fraud conspiracy charged in Count One carries; the securities fraud counts charged in Counts Two through Seven each carry a maximum potential penalty of 20 years in prison and a $5 million fine; the securities fraud count charged in Count Eight and the securities fraud conspiracy charged in Count Nine each carry a maximum potential penalty of 25 years in prison and a $250,000 fine.
The U.S. Securities and Exchange Commission previously filed a civil complaint against Matthaei based on the same conduct.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the indictment.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The post Monmouth County Man Indicted For Illegal Trading Scheme appeared first on Jersey Shore Online.