(Bloomberg) -- A former trader at Canada’s Polar Asset Management Partners who last year confessed to front-running his firm’s trades has pleaded guilty to another crime — this one involving tips he provided to a friend at a New Jersey broker-dealer about confidential merger talks.
Sean Wygovsky, 42, of Centreville, Virginia, entered his plea Thursday in a New Jersey federal court to one count of securities fraud as part of a deal with prosecutors. He acknowledged he shared information with Christopher Matthaei about negotiations by special purpose acquisition companies from May 2020 to February 2021. Matthaei, then a partner at a broker-dealer firm with offices in Red Bank, used the information to make about $3.4 million in profits, prosecutors said.
The two men had a close business relationship since 2013, with Matthaei providing market research and execution services for Wygovsky’s trading at Polar, and they vacationed together one or more times a year, according to court filings. Matthaei, who was arrested in March and charged with conspiracy and securities fraud, allegedly paid for a private extended trip for Wygovsky and their families to a luxury resort on the island of St. Barts in June 2020, where they continued their scheme, according to the government.
Wygovsky was charged in July 2021 with reaping $3.6 million from January 2015 through April 2021 by stealing confidential information to front-run trades at Toronto-based Polar. Federal prosecutors in New York said he made profits from predictable, small changes in the price of stocks in the wake of Polar transactions by trading ahead of the firm’s larger trades in the shares of companies including Carparts.com, Now Inc. and Merit Medical Systems Inc.
Wygovsky, who worked at Polar from 2013 until 2021, pleaded guilty in federal court in New York in September and has yet to be sentenced in that case. On the New Jersey charge, he is set to be sentenced Sept. 27 in Trenton and agreed not to contest any punishment of 63 months or less. Prosecutors agreed not to challenge any sentence of less than 51 months.
Matthaei, of Brielle, New Jersey, was released on a $250,000 unsecured bail bond after an initial appearance in Newark in March. He faces as much as 20 years in prison if convicted.
Polar and attorneys for the two men didn’t immediately respond to requests for comment on Wygovsky’s plea.
The New Jersey case is US v Wygovsky, 23-cr-395, US District Court, District of New Jersey (Trenton.) The New York case is US v Wygovsky, 21-cr-718, US District Court, Southern District of New York (Manhattan.) Matthaei’s case is US v Matthaei, 23-mj-9114, US District Court, District of New Jersey (Newark.)
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