Brielle man accused of insider trading scheme and exploiting a close friend
NEWARK – A Brielle man and former partner at a broker-dealer firm was charged Thursday after allegedly engaging in an insider trading scheme and exploiting his relationship with a close friend, profiting millions of dollars, U.S. Attorney Philip R. Sellinger announced today.
Christopher Matthaei, 44, was charged with one count of securities fraud conspiracy and one count of securities fraud, Sellinger said. He appeared Thursday before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was released on $250,000 unsecured bond.
Sellinger said that Matthaei illegally exploited his relationship with a close friend to gain access to confidential information about yet-to-be-announced mergers and acquisitions. He is alleged to have made trades on seven special purpose acquisition companies (SPACs) that made him $3.4 million in illegal profits.
"SPACs may have been a hot trend on Wall Street, but the District of New Jersey will continue to be relentless in bringing inside traders to justice, no matter the market trends," said Sellinger.
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Matthaei was a partner and senior salesperson at a Charlotte, North Carolina-based broker-dealer with offices in Red Bank, according to court documents. Between May 2020 and February 2021, he illegally traded on material, non-public information (MNPI) that he received from a friend who worked at a large Canadian asset management firm.
The information was related to companies that were engaged in confidential merger negotiations and shared information with the asset management firm as a potential investor in the deals, court documents said. Matthaei's friend received this information whenever a company was put on his firm's confidential restricted list, which meant the firm's employees weren't allowed to buy or sell the company's securities, either personally or via another person or third party.
Despite knowing this, Matthaei's friend shared the information with him, and Matthaei then purchased securities using his personal brokerage accounts, according to Sellinger. In June 2020 Matthaei paid for a private plane and extended trip with the co-conspirator and their families to a luxury resort on the island of St. Barth, where they continued engaging in the trading scheme.
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The securities fraud count carries a maximum penalty of 20 year in prison and a $5 million fine, Sellinger said. The securities fraud conspiracy count carries a maximum of five years in prison and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greatest.
Sellinger said the U.S. Securities and Exchange Commission also filed a civil complaint against Matthaei today based on the same conduct.
Jenna Calderón covers breaking news and cold cases in Monmouth and Ocean counties. Before coming to the Press, she covered The Queen City for Cincinnati Magazine in Ohio. Contact her at 330-590-3903; jcalderon@gannettnj.com
This article originally appeared on Asbury Park Press: Brielle NJ man charged in insider trading scheme, police say
