On September 23, 2021, the Securities and Exchange Commission (“Commission” or “Plaintiff”), represented by David Misler, attorney at SEC’s DC regional office, filed a civil enforcement action against Sergei Polevikov (“Polevikov” or “Defendant”) and Relief Defendant Maryna Arystava (“Arystava”), seeking injunctive relief, payment of civil penalties, and disgorgement of all ill-gotten gains along with prejudgment interest for the alleged illegal conduct of Defendant which violated various federal securities laws. This case was filed in the U.S. District Court in the Southern District of New York.
In the complaint Plaintiff alleged that, “Between at least January 2014 and October 2019 (the “Relevant Period”), Polevikov engaged in a scheme to violate the federal securities laws by using material non-public information to secretly trade ahead of (i.e., front-run) large securities trades entered by his employers, two large registered investment advisers, while working as a quantitative analyst. Polevikov conducted his illegal trading in the brokerage account of his wife, Relief Defendant Maryna Arystava, and actively concealed both the trading and the existence of the account from his employers. Polevikov’s violations of the securities laws resulted in over $8.5 million in trading profits.”
Plaintiff further alleged that, “Through his job at Advisery Firm 1 and Advisery Firm 2 (collectively, “the Advisery Firms”), Polevikov became privy to material, non-public information regarding the size and timing of large securities trades the Advisery Firms intended to make for their clients, which included investment companies registered under the Investment Company Act of 1940 (“Registered Investment Companies”). Polevikov defrauded his employers and their clients by using that material non-public information to trade on, and ahead of, thousands of the Advisery Firms’ trades.”
Plaintiff also alleged that, “Polevikov’s illegal use of material non-public information also breached his duty of trust and confidence to the Advisery Firms and their clients. In total, on about 3,000 occasions, Polevikov used this material non-public information to execute trades in his wife’s brokerage account in the same securities and on the same day that the Advisery Firms executed large securities trades, front-running his employers’ trades for clients. Polevikov concealed his trading activity by not disclosing his trades and the existence of his wife’s brokerage account to the Advisery Firms as required by Commission Rules and his employers’ internal policies.”
There are five claims for relief laid down by Plaintiff. The first claim is for the alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The second claim is for the alleged violations of Section 17(a) of the Securities Act. The third claim is for the alleged violations of Section 17(j) of the Investment Company Act [15 U.S.C. § 80a-17] and Rule 17j-1(b)(1) and (3) [17 C.F.R. § 270.17j-1(b)(1) and (3)] thereunder. The fourth claim is for the alleged violations of Section 17(j) of the Investment Company Act [15 U.S.C. § 80a-17] and Rule 17j-1(d) [17 C.F.R. § 270.17j-1(d)] thereunder. The fifth claim is for alleged unjust enrichment liability.
In its prayer for relief Plaintiff has requested the court to permanently restrain and enjoin Defendant from directly violating Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5 thereunder, permanently restrain and enjoin Defendant from directly engaging in conduct in violation of Section 17(a) of the Securities Act, and order Defendant and Relief Defendant to disgorge all illicit gains, with prejudgment interest.
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Pending - Other Pending
Securities & Exchange Commission
Attorney at Securities and Exchange Commission (DC)
100 F Street, N.E.
Washington, DC 20549
Exhibit Certificate of Good Standing (DC)
Exhibit Certificate of Good Standing (Maryland)
Text of Proposed Order
(#2) CIVIL COVER SHEET filed..(Misler, David) (Entered: 09/23/2021)
(#1) COMPLAINT against Maryna Arystava, Sergei Polevikov. Document filed by Securities & Exchange Commission..(Misler, David) (Entered: 09/23/2021)
Docket(#3) MOTION for David Misler to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Securities & Exchange Commission. (Attachments: #1 Affidavit, #2 Text of Proposed Order, #3 Exhibit Certificate of Good Standing (Maryland), #4 Exhibit Certificate of Good Standing (DC)).(Misler, David) (Entered: 09/23/2021)Read MoreRead Less
Docket(#2) CIVIL COVER SHEET filed..(Misler, David) (Entered: 09/23/2021)Read MoreRead Less
Docket(#1) COMPLAINT against Maryna Arystava, Sergei Polevikov. Document filed by Securities & Exchange Commission..(Misler, David) (Entered: 09/23/2021)Read MoreRead Less
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