The United States Securities and Exchange Commission (SEC) has reached a partial settlement with Sean Wygovsky, who is charged with fraud in connection with a front-running scheme.
A letter submitted by the SEC at the New York Southern District Court today explains that the Commission and Defendant Sean Wygovsky have reached a partial settlement of the Commission’s claim.
The proposed partial Judgment, seen by FX News Group, enjoins Mr. Wygovsky from committing additional violations of the federal securities laws that the Commission charged him with violating, but leaves for later resolution the Commission’s claims for monetary relief.
The SEC hopes that the parties will be able to reach a settlement of these outstanding claims after resolution of the related criminal case.
According to the SEC’s complaint, from approximately January 2015 through at least April 2021, Wygovsky repeatedly traded in his family members’ accounts held at brokerage firms in the United States ahead of large trades that were executed on the same days in the accounts of his employer’s advisory clients.
On over 600 occasions, Wygovsky allegedly bought or sold a stock for one his relatives’ accounts either before the client accounts began executing a large order for the same stock on the same side of the market, or during the time period when tranches of such a large order were being executed. Then, typically before the client accounts completed their executions, Wygovsky allegedly closed out the just-established positions in his relatives’ accounts, nearly always at a profit.
The scheme, which Wygovsky perpetrated in the accounts of his close family members, netted more than $3.6 million in illicit gains.