Lawrence Billimek and Alan Williams

On December 14, 2022, the Securities and Exchange Commission announced fraud charges against Lawrence Billimek, an employee of a major asset management firm with securities portfolios worth billions of dollars, and Alan Williams, who previously worked at several financial industry firms, for perpetrating a multi-year front-running scheme that generated at least $47 million in illegal trading profits.

The SEC's complaint, filed in federal district court in Manhattan, alleges that, since at least September 2016, Billimek would inform Williams of the asset management firm's market-moving trades prior to their execution. As the complaint alleges, on the same day, Williams would trade in the same securities prior to Billimek's employer or while multiple large orders were being placed by the employer. Williams would close his positions after the price of the security moved as expected. This alleged front-running scheme resulted in proceeds of more than $47 million. The SEC staff analyzed trading using the Consolidated Audit Trail (CAT) database to uncover William's allegedly fraudulent trading and to identify how he profited by repeatedly front-running large trades by Billimek's employer.

In a parallel action, the U.S. Attorney's Office for the Southern District of New York announced criminal charges against Billimek and Williams.

Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. It also charges Billimek with violating Section 17(j) of the Investment Company Act of 1940 and Rules 17j-1(b)(1) and (3) thereunder.

The SEC's investigation was conducted by Market Abuse Unit members David Bennett, John Rymas, Jeffrey Oraker, and Frank Goldman with assistance from Darren Boerner and John Marino of the Market Abuse Unit's Analysis and Detection Center and Judy Tran, Donald Hong, and Frank A. Brown II of the SEC's Division of Economic and Risk Analysis. The case was supervised by Danielle Voorhees and Joseph G. Sansone. The SEC's litigation will be led by Terry Miller of the SEC's Denver Regional Office. 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.