Employees Named Billimek and Williams Charged by SEC in $47 Million Front-Running Scheme
A multi-year front-running scheme that generated at least $47 million in illegal trading profits has been charged with fraud by the Securities and Exchange Commission today against Lawrence Billimek, an employee of a major asset management firm with securities portfolios worth billions of dollars, and Alan Williams, who has previously worked at several firms in the financial industry.
The scheme was perpetrated by Billimek and Williams, who are both accused of engaging in the scheme. The complaint that was filed by the SEC in the federal district court in Manhattan alleges that since at least September 2016, Billimek would inform Williams of the market-moving trades that were being executed by the asset management firm before those trades were carried out.
According to the allegations contained in the complaint, Williams would engage in trading in the same securities before Billimek’s employer on the same day, or while the employer was simultaneously placing multiple large orders. After the price of the security moved as anticipated, Williams would close his positions and get out of the market.
The alleged front-running scheme brought in more than 47 million dollars in profits. The staff of the SEC investigated trading using the Consolidated Audit Trail (CAT) database in order to discover allegedly fraudulent trading conducted by William and to determine how he made a profit by repeatedly front-running large trades conducted by Billimek’s employer.
According to Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit, “Billimek is alleged to have taken advantage of his position and abused the trust of his employer by providing Williams with proprietary information that allowed them to gain a trading advantage and pocket tens of millions of dollars in profits.”
Billimek is charged with taking advantage of his position and abusing the trust of his employer. As the action taken today demonstrates, staff at the SEC will utilize data analytics tools at our disposal to locate individuals who engage in illegal trading of securities and bring charges against them,”In a separate but related development, the United States Attorney’s Office for the Southern District of New York has just announced that criminal charges will be brought against Billimek and Williams.
The complaint filed by the SEC alleges that Billimek and Williams violated the antifraud provisions of the federal securities laws. Additionally, the complaint requests that the SEC seek disgorgement of ill-gotten gains in addition to interest, penalties, and injunctive relief.
Members of the Market Abuse Unit David Bennett, John Rymas, Jeffrey Oraker, and Frank Goldman were responsible for conducting the investigation on behalf of the SEC. They were assisted in this endeavor by Darren Boerner and John Marino of the Market Abuse Unit’s Analysis and Detection Center as well as Judy Tran, Donald Hong, and Frank A.
Brown II of the SEC’s Division of Economic and Risk Analysis. Danielle Voorhees and Mr. Sansone were in charge of overseeing the investigation. Terry Miller, who works in the Denver Regional Office of the SEC, will serve as the litigation’s lead attorney. The Securities and Exchange Commission is grateful to the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation for their assistance in this investigation.
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