The Securities and Exchange Commission has obtained a final judgment against Sergei Polevikov, who worked as a quantitative analyst at two asset management firms, for perpetrating a front-running scheme that generated profits of approximately $8.5 million. The SEC also barred him from the securities industry.

According to the SEC's complaint, filed in federal court in Manhattan, from at least January 2014 through October 2019, Polevikov had access to real-time, non-public information about the size and timing of his employers' securities orders and trades, and used that information to secretly trade on, and ahead of, his employers' trades. As alleged, Polevikov, on nearly 3,000 occasions, bought or sold a stock on the same side of the market as his employers before his employers executed trades in the same stock for their fund clients. Polevikov typically would close his positions the same day as he opened them, capitalizing on the price movement caused by his employers' large trades. The SEC alleges that Polevikov concealed his fraudulent scheme by executing the trades in the account of his wife, who uses a different last name.

Polevikov was also charged criminally for his alleged conduct, and pled guilty on December 15, 2021. He was sentenced to a prison term of 33 months followed by two years of supervised release and ordered to pay a fine of $10,000 and forfeiture of $8,564,977.

The final judgment against Polevikov, entered on July 29, 2022 by the U.S. District Court for the Southern District of New York, enjoins Polevikov from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, Section 17(j) of the Investment Company Act of 1940 and Rules 17j-1(b)(1) and (3) and 17j-1(d) thereunder. The final judgment also holds Polevikov liable for disgorgement of his ill-gotten gains, which is deemed satisfied by the forfeiture order in the criminal case. Based on the entry of the judgment and Polevikov's criminal conviction, the SEC barred Polevikov from the securities industry. On the same day the judgment was entered, the court, with the SEC's consent, dismissed claims against Polevikov's wife, Maryna Arystava, who had been named as a relief defendant for the purpose of recovering the proceeds of the fraud.

The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation.