Quant At Investment Management Firm Charged With Securities And Wire Fraud

United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), Christopher G. Raia, announced today an Indictment charging JIAN WU with engaging in a scheme to defraud his employer, a New York-based investment management firm (the "Firm"), by secretly manipulating computer-based algorithmic investment models that were used to execute securities trading strategies at the Firm. WU is currently a fugitive, and the case has been assigned to U.S. District Judge Paul G. Gardephe.

"As alleged, Jian Wu deceived his employer, a quantitative trading firm, into paying him millions of dollars of unearned compensation," said U.S. Attorney Jay Clayton. "Wu's employer trusted him to act with integrity when creating models for the firm's use. Instead, Wu used his technical abilities to cheat his employer out of millions. This Office will continue to work closely with our law enforcement partners to investigate, detect, and prosecute fraud in the securities markets wherever we find it."

"Jian Wu allegedly abused his position to manipulate data models, which resulted in an undeserved multimillion-dollar award for his unlawful actions," said FBI Assistant Director in Charge Christopher G. Raia. "In doing so, Wu betrayed the trust of his employer who relied on his expertise. The FBI continues its steadfast promise to hold accountable those who seek to exploit their positions to generate illicit compensation."

As alleged in the Indictment:^[1]

WU was employed as a modeler at the Firm, a quantitative investment management firm in Manhattan. In his role, WU designed models for the Firm's investment vehicles and related funds, using data to build price forecasting models that generated forecasts on stocks and other financial instruments.

Between 2021 and 2023, WU deceived the Firm by manipulating trading models he created in order to increase his own compensation. Specifically, WU designed models, which were approved and released for use, and then covertly made post-release changes to the models' parameters, which significantly altered the models' behavior. WU also secretly tested his models on data sets that misrepresented how the models would perform once approved and released. As a result of these changes and misrepresentations, the Firm rewarded WU with an inflated year-end compensation of approximately $23 million. WU then used a portion of his compensation to purchase a multimillion-dollar apartment in Manhattan. When the Firm uncovered WU's scheme, WU made additional unauthorized changes to the models' parameters in an attempt to conceal his prior tampering. The Firm fired WU in 2024.

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WU, 34, of China, is charged with one count each of wire fraud, securities fraud, and money laundering, each of which carries a maximum sentence of 20 years in prison.

The maximum potential sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Clayton praised the outstanding work of the FBI. Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission, which separately initiated civil proceedings against the defendant today.

The case is being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Alexander Li and Alexandra Rothman are in charge of the prosecution.