Brielle Man Admits To Securities Fraud

BRIELLE, NJ — A former partner at a New Jersey brokerage 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, pleaded guilty Thursday before U.S. District Judge Georgette Castner in Trenton federal court to conspiracy to commit securities fraud.

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

Matthaei worked as a partner and senior salesperson at a broker with offices in Red Bank.

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.

He's facing up to five years in prison and a fine of up to $250,000. Sentencing for Matthaei is scheduled for February 25, 2027.