TRENTON, NJ — A Brielle man who worked as a partner and senior salesperson at a Red Bank-based broker-dealer pleaded guilty to conspiring to commit securities fraud in an insider trading scheme that generated nearly $1.5 million in illegal profits, federal prosecutors announced.
Christopher Matthaei, 48, entered his guilty plea on October 22 in federal court in Trenton. The case involved trading on confidential information about a publicly traded special purpose acquisition company (SPAC), that was preparing to merge with another company.
According to court documents and statements made in court, Matthaei conspired with Sean Wygovsky, a former client and close personal friend, to profit from confidential information about the company's merger discussions.
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Wygovsky, who worked as a trader for a Canada-based asset management company, learned that the SPAC was engaged in confidential merger talks with a target company. In May 2020, he shared that information with Matthaei through an encrypted messaging platform, intending for Matthaei to use it to make profitable trades, according to prosecutors.
Wygovsky previously pleaded guilty to securities fraud related to the scheme in May 2023.
After receiving the information, Matthaei repeatedly purchased securities in the SPAC between May 29 and June 18, 2020, despite knowing that the information was confidential and that trading on it was prohibited, according to court filings.
On June 19, 2020, SPAC publicly announced that it had entered into a merger agreement with the target company. The announcement substantially increased the value of Matthaei's holdings, and he began selling his securities that same day.
Those transactions generated nearly $1.5 million in illegal profits.
Under the terms of his plea agreement, Matthaei also acknowledged earning total profits of between $2 million and $3.5 million when other relevant conduct was taken into account.
The charge carries a maximum potential sentence of five years in prison and a fine of up to $250,000, or twice the defendant's gross gain or the victim's loss, whichever amount is greatest.
His sentencing is scheduled for Feb. 25, 2027, in federal court in Trenton.
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