By: Richard L. Smith
A former partner at a New Jersey brokerage firm has pleaded guilty to participating in an insider trading scheme that generated millions of dollars in illegal profits.
According to information released by U.S. Attorney Robert Frazer, Christopher Matthaei, 48, of Brielle, admitted to conspiring to commit securities fraud during an appearance before U.S. District Judge Georgette Castner in Trenton federal court.
Federal prosecutors said Matthaei worked as a senior salesperson and partner at a brokerage firm with offices in Red Bank when he joined forces with a close friend and former client, Sean Wygovsky, to profit from confidential financial information.
Investigators said Wygovsky, who worked as a trader for a Canadian asset management company, learned about private merger negotiations involving a publicly traded special purpose acquisition company, commonly known as a SPAC.
Rather than keeping the information confidential, Wygovsky allegedly shared details with Matthaei through an encrypted messaging platform in May 2020.
Prosecutors said Matthaei used the information to repeatedly purchase securities between May 29 and June 18, 2020, knowing the information had not been made public.
When the merger was officially announced on June 19, 2020, the value of those investments increased significantly.
Matthaei began selling his holdings that same day, ultimately collecting nearly $1.5 million in illegal profits from those transactions.
Federal officials said Matthaei acknowledged in his plea agreement that his total profits, including other related conduct, ranged between $2 million and $3.5 million.
Wygovsky previously pleaded guilty to securities fraud in May 2023 for his involvement in the scheme.