The Securities and Exchange Commission (SEC) today announced fraud charges against Sean Wygovsky, a trader at a major Canada-based asset management firm, in connection with a front-running scheme.

The scheme, which Wygovsky perpetrated in the accounts of his close family members, netted more than $3.6 million in illicit gains.

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.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Wygovsky.

The SEC’s complaint, filed in federal court in New York, charges Wygovsky with violating the antifraud provisions of the federal securities laws and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.