The Securities and Exchange Commission today 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.

“Billimek allegedly took advantage of his position and abused his employer’s trust by providing Williams with proprietary information that allowed them to gain a trading advantage and pocket tens of millions of dollars in profits,” said Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit. “As today’s action shows, SEC staff will utilize data analytics tools at our disposal to find and charge those who engage in illegal trading of securities.”

Source for more: sec.gov