Former Partner at Broker-Dealer Firm Indicted for Role in $3.4 Million Insider Trading Scheme

NEWARK, NJ. - A former partner at a New Jersey broker-dealer firm was arraigned on charges of engaging in an insider trading scheme that netted millions of dollars in illegal trading profits, U.S. Attorney Philip R. Sellinger announced today.

Christopher Matthaei, 44, of Brielle, New Jersey, was arraigned today before U.S. District Judge Georgette Castner in Trenton federal court on July 17, 2024. Matthaei was indicted by a federal grand jury on June 21, 2024, with two counts of securities fraud conspiracy (Counts One and Nine) and seven counts of securities fraud (Counts Two through Eight).

According to documents filed in this case and statements made in court:

Matthaei was a partner and senior salesperson at a Charlotte, North Carolina-based broker-dealer with offices in Red Bank, New Jersey. From May 2020 through 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. 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. 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, who then purchased securities in the SPACs using his personal brokerage accounts. In June 2020, Matthaei paid for a private plane and extended trip with Wygovsky and their families to a luxury resort on the island of St. Barts, where they continued to engage in the insider trading scheme.

In total, Matthaei made approximately $3.4 million in illegal trading profits from the insider trading scheme.

Wygovsky pleaded guilty on May 25, 2020, before Judge Castner to an information charging him with securities fraud in connection with the insider trading scheme.

The securities fraud conspiracy charged in Count One carries a maximum potential penalty of five years in prison and a $250,000 fine; 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 government is represented by Assistant U.S. Attorneys Jennifer Kozar and Shontae D. Gray of the U.S. Attorney's Office Economic Crimes Unit in Newark.

The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.