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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1:21-CV-07925
09/23/2021
Pending - Other Pending
Finance - Security/Commodity/Exchange
Valerie E. Caproni
Securities & Exchange Commission
Sergei Polevikov
Maryna Arystava
Melissa Jane Armstrong
Jeannie Rose Rubin
Michael Gerber
(#22) ORDER granting #21 Letter Motion for Extension of Time. Application GRANTED. The Initial Pre-Trial Conference currently scheduled for November 19, 2021, at 3:30 p.m. is hereby ADJOURNED until January 21, 2022 at 11:00 a.m. The Case Management Plan and joint letter are due on January 13, 2021. For dial-in information and corresponding deadlines, see Dkt. 4. SO ORDERED. (Signed by Judge Valerie E. Caproni on 11/12/2021) (tg) (Entered: 11/12/2021)
(#21) JOINT LETTER MOTION for Extension of Time to File Proposed Case Management Plan addressed to Judge Valerie E. Caproni from all parties dated November 12, 2021. Document filed by Securities & Exchange Commission..(Armstrong, Melissa) (Entered: 11/12/2021)
(#20) ORDER granting #19 Motion to Withdraw as Attorney. IT IS ORDERED that the Motion is GRANTED, and Stephan Schlegelmilch is WITHDRAWN as attorney for plaintiff U.S. Securities and Exchange Commission. Plaintiff will continue to be represented in this matter by its remaining counsel of record. SO ORDERED. Attorney Stephan Jacob Schlegelmilch terminated. (Signed by Judge Valerie E. Caproni on 11/5/2021) (tg) (Entered: 11/05/2021)
Text of Proposed Order
Main Document
Text of Proposed Order
Certificate of Good Standing
Affidavit
Main Document
(#5) REQUEST FOR ISSUANCE OF SUMMONS as to Sergei Polevikov, re: #1 Complaint. Document filed by Securities & Exchange Commission..(Misler, David) (Entered: 09/27/2021)
(#4) NOTICE OF INITIAL PRETRIAL CONFERENCE: At the scheduled time, counsel for all parties should call 888-363-4749, Access code 3121171#, Security code 7925. Initial Conference set for 11/19/2021 at 03:30 PM before Judge Valerie E. Caproni. (Signed by Judge Valerie E. Caproni on 9/27/2021) (tg) (Entered: 09/27/2021)
Exhibit Certificate of Good Standing (DC)
Exhibit Certificate of Good Standing (Maryland)
Text of Proposed Order
Affidavit
Main Document
DocketSet/Reset Hearings: Initial Conference set for 1/21/2022 at 11:00 AM before Judge Valerie E. Caproni. (tg) (Entered: 11/12/2021)
[-] Read LessDocket(#22) ORDER granting #21 Letter Motion for Extension of Time. Application GRANTED. The Initial Pre-Trial Conference currently scheduled for November 19, 2021, at 3:30 p.m. is hereby ADJOURNED until January 21, 2022 at 11:00 a.m. The Case Management Plan and joint letter are due on January 13, 2021. For dial-in information and corresponding deadlines, see Dkt. 4. SO ORDERED. (Signed by Judge Valerie E. Caproni on 11/12/2021) (tg) (Entered: 11/12/2021)
[-] Read LessDocket(#21) JOINT LETTER MOTION for Extension of Time to File Proposed Case Management Plan addressed to Judge Valerie E. Caproni from all parties dated November 12, 2021. Document filed by Securities & Exchange Commission..(Armstrong, Melissa) (Entered: 11/12/2021)
[-] Read LessDocket(#20) ORDER granting #19 Motion to Withdraw as Attorney. IT IS ORDERED that the Motion is GRANTED, and Stephan Schlegelmilch is WITHDRAWN as attorney for plaintiff U.S. Securities and Exchange Commission. Plaintiff will continue to be represented in this matter by its remaining counsel of record. SO ORDERED. Attorney Stephan Jacob Schlegelmilch terminated. (Signed by Judge Valerie E. Caproni on 11/5/2021) (tg) (Entered: 11/05/2021)
[-] Read LessDocket(#19) MOTION for Stephan J. Schlegelmilch to Withdraw as Attorney . Document filed by Securities & Exchange Commission. (Attachments: #1 Text of Proposed Order).(Schlegelmilch, Stephan) (Entered: 11/04/2021)
[-] Read LessDocket>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #18 MOTION for Melissa J. Armstrong to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (bcu) (Entered: 11/03/2021)
[-] Read LessDocket(#18) MOTION for Melissa J. Armstrong 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 Certificate of Good Standing, #3 Text of Proposed Order).(Armstrong, Melissa) (Entered: 11/02/2021)
[-] Read LessDocket(#17) STIPULATION AND ORDER EXTENDING THE TIME FOR DEFENDANT AND RELIEF DEFENDANT TO RESPOND TO THE COMPLAINT: IT IS HEREBY STIPULATED AND AGREED by the undersigned attorneys for Plaintiff Securities and Exchange Commission and for Defendant Sergei Polevikov and Relief Defendant Maryna Arystava that the time for Mr. Polevikov and Ms. Arystava to answer, move, or otherwise respond to the Complaint filed in the above-captioned litigation is extended from October 21, 2021 to December 20, 2021. Maryna Arystava answer due 12/20/2021; Sergei Polevikov answer due 12/20/2021., Motions terminated: #16 LETTER MOTION for Extension of Time to File Response/Reply addressed to Judge Valerie E. Caproni from Michael Gerber dated 10/12/2021. filed by Sergei Polevikov. (Signed by Judge Valerie E. Caproni on 10/13/2021) (tg) (Entered: 10/13/2021)
[-] Read LessDocket(#16) LETTER MOTION for Extension of Time to File Response/Reply addressed to Judge Valerie E. Caproni from Michael Gerber dated 10/12/2021. Document filed by Sergei Polevikov. (Attachments: #1 Text of Proposed Order Extending the time for defendant and relief defendant to respond to complaint).(Gerber, Michael) (Entered: 10/12/2021)
[-] Read LessDocket(#15) NOTICE OF APPEARANCE by Michael Gerber on behalf of Sergei Polevikov..(Gerber, Michael) (Entered: 10/12/2021)
[-] Read LessDocket(#5) REQUEST FOR ISSUANCE OF SUMMONS as to Sergei Polevikov, re: #1 Complaint. Document filed by Securities & Exchange Commission..(Misler, David) (Entered: 09/27/2021)
[-] Read LessDocket(#4) NOTICE OF INITIAL PRETRIAL CONFERENCE: At the scheduled time, counsel for all parties should call 888-363-4749, Access code 3121171#, Security code 7925. Initial Conference set for 11/19/2021 at 03:30 PM before Judge Valerie E. Caproni. (Signed by Judge Valerie E. Caproni on 9/27/2021) (tg) (Entered: 09/27/2021)
[-] Read LessDocketCase Designated ECF. (pc) (Entered: 09/24/2021)
[-] Read LessDocketMagistrate Judge James L. Cott is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (pc) (Entered: 09/24/2021)
[-] Read LessDocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Valerie E. Caproni. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(pc) (Entered: 09/24/2021)
[-] Read LessDocket***NOTICE TO ATTORNEY REGARDING CIVIL. CASE OPENING STATISTICAL ERROR CORRECTION: Notice to attorney David Misler. The following case opening statistical information was erroneously selected/entered: Fee Status code none (no fee required);. The following correction(s) have been made to your case entry: the Fee Status code has been modified to wv (waived);. (pc) (Entered: 09/24/2021)
[-] Read LessDocket>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #3 MOTION for David Misler to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (bcu) (Entered: 09/24/2021)
[-] Read LessDocket(#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 LessDocket(#2) CIVIL COVER SHEET filed..(Misler, David) (Entered: 09/23/2021)
[-] Read LessDocket(#1) COMPLAINT against Maryna Arystava, Sergei Polevikov. Document filed by Securities & Exchange Commission..(Misler, David) (Entered: 09/23/2021)
[-] Read Less