Former Partner at Broker-Dealer Firm Pleads Guilty to Securities Fraud Conspiracy

TRENTON, N.J. - A former partner at a New Jersey broker-dealer firm admitted to conspiring to commit securities fraud involving insider trading in a special purpose acquisition company that netted millions of dollars in illegal profits, U.S. Attorney Robert Frazer announced.

Christopher Matthaei, 48, of Brielle, New Jersey, pleaded guilty yesterday before U.S. District Judge Georgette Castner in Trenton federal court to a Superseding Information charging him with conspiracy to commit securities fraud.

According to documents filed in the cases and statements made in court:

Matthaei worked as a partner and senior salesperson at a broker-dealer with offices in Red Bank, New Jersey. Matthaei conspired with his then-client and close personal friend, Sean Wygovsky, to engage in an insider trading scheme involving material nonpublic information regarding a special purpose acquisition company ("SPAC-1"). Like other SPACs, SPAC-1 was a publicly traded shell company that existed solely for the purpose of merging with another company. After Wygovsky learned through his role as a trader at a Canada-based asset management company that SPAC-1 was engaged in confidential merger discussions with a target company, Wygovsky shared that material nonpublic information with Matthaei on or about May 28, 2020 using an encrypted messaging platform, with the intention that Matthaei would trade on and profit from that nonpublic information. Wygovsky previously pleaded guilty on or about May 25, 2023, to securities fraud related to this scheme.

Based on that tip and other tips of material nonpublic information from Wygovsky concerning SPAC-1's merger discussions, Matthaei repeatedly purchased SPAC-1 securities between May 29, 2020 and June 18, 2020, despite knowing that Wygovsky was prohibited from sharing that information with him and that Matthaei was prohibited from trading on it. After SPAC-1 publicly announced on June 19, 2020 that it had entered into a merger agreement with the target company, Matthaei's positions in SPAC-1 substantially increased in value. That same day, Matthaei began selling his SPAC-1 securities, ultimately generating illicit profits in the total amount of nearly $1.5 million. Overall, as part of his plea agreement, Matthaei agreed that he earned profits in a total amount of between $2 million and $3.5 million after factoring in other relevant conduct.

The charge of conspiracy to commit securities fraud carries a maximum potential penalty of 5 years in prison and a fine of up to $250,000, or twice the gross gain to the defendant or loss to the victim, whichever is greatest. Sentencing for Matthaei is scheduled for February 25, 2027.

U.S. Attorney Frazer credited special agents of the FBI, under the direction of Special Agent in Charge Stefanie Roddy in Newark, with the investigation leading to the charges and guilty plea. U.S. Attorney Frazer also thanked the U.S. Securities and Exchange Commission and the Criminal Prosecution Assistance Group at the Financial Industry Regulatory Authority for assistance throughout the investigation.

The government is represented by Assistant U.S. Attorneys Jennifer S. Kozar, Rachelle M. Navarro, and Casey S. Smith of the Criminal Division in Newark.

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Defense counsel:

Michael Critchley, Esq.

Amy Luria, Esq.

Armando Suarez, Esq.