The U.S. Securities and Exchange Commission and the U.S. Department of Justice on the 11th filed a civil criminal double lawsuit against pre-quantitative researcher Wu Fei of Two Sigma Investments, accusing him of secretly manipulating algorithmic investment models to raise his salary by means of fraud.

Two Sigma fired Wu Ships in 2024

The U.S. Securities and Exchange Commission (SEC) said in a civil lawsuit that Wu Feng received about $23 million in performance bonuses from these manipulated models, with an annual salary of $2350.9 million in 2022 (approximately RMB 1.6 billion), and that his actions caused at least $1.65 billion in losses to company customers. In 2024, the company fired Wu Feng and reimbursed $1.65 billion in customer losses.

Chongqing University + Chongqing University

Accused of cheating companies in at least two ways

According to reports, Wu Feng grew up in Anguilla, China, and graduated from Qingdao University¡¯s graduate degree in automation. He then went to the United States, obtaining a PhD in Operations Studies at Cornell University and a PhD from the University of Southern California. In 2018, Wu Feng joined the top quantitative fund Two Sigma, headquartered in Manhattan, New York. He promoted along the way, serving as vice president and senior vice president.

The core of Wu¡¯s work is to design complex quantitative models that use data to predict price movements for financial instruments such as stocks.Two Sigma trades algorithms based on these models.

Shared photos on the net.

At present, Wu was accused of deceiving the company in at least two ways.

The indictment said that between 2021 and 2023, Wu submitted at least 14 models and received approval, and "secretly made changes to the parameters of the model" after the changes "significantly changed the behavior of the model".

In addition, the U.S. Securities and Exchange Commission¡¯s complaint pointed out that Wu Fei lied to the company that these models were generating ¡°unique¡± predictions, while in fact these unauthorized changes led them to ¡°substantially replicate¡± predictions from other Two Sigma models.

The indictment states that Wu was intended to do so "to increase the amount of remuneration that the company granted him."

At the end of 2022, Wu Shield, due to the excellent performance of his model, ¡°requested a substantial increase in salary¡± from the executive, and the company awarded him a performance bonus of about $23 million.

I wanted to complain to the company.

He has also been ¡°righteous¡± on social media.

These manipulated models brought a lot of money to Wu Shipping, but brought tangible losses to customers, according to sources informed that the changes resulted in an unexpected total of $6.2 billion, with hedge fund clients bearing $1.6 billion in losses.

In 2023, Wu ship on a social media in China "silently show rich," said: "I dare not send a circle of friends, my mind is still too young, want to find a place no one knows hidden show ..."

Mr. Wade is ¡°silently rich¡± on social media.

In the same year, other employees at Two Sigma noticed that Wu¡¯s model ¡°appeared to be more relevant to the existing model than expected,¡± according to the prosecution, when the company questioned Wu¡¯s behavior, he attempted to cover up its inappropriate behavior and even ¡°made additional unauthorized changes to the model¡¯s de-relevance parameters to cover up his previous manipulative behavior.¡±

During talks in August 2023, Wu admitted that he changed the model parameters without the necessary approval.

In December 2023, Wu had filed a legal petition denying responsibility for losses and preparing to appeal against Two Sigma. He argued that researchers modifying their design models without approval was a ¡°common practice¡± to blame any loss for ¡°Two Sigma¡¯s extremely weak control and reckless investment decisions.¡±

Wu also pointed to the chaos at Two Sigma's top level, noting that there were "significant complaints" between the company's two billionaire co-founders, and that the tensions between the two had seriously affected the company's operations and were even by the company in regulatory documents as a "significant risk".

in a state of escape.

The maximum sentence for each crime is 20 years.

In addition, the U.S. government is still seeking to confiscate the Manhattan apartment he bought with illegal income. The U.S. Office of the Federal Attorney for the Southern District of New York noted in a September 11 statement that Wu was charged with telecommunications fraud, securities fraud and money laundering. He is currently ¡°running away¡±. This means that the trial and final sentencing proceedings of the case could not be advanced until he was arrested.

According to the U.S. Department of Justice documents, the maximum sentence for each crime is 20 years in prison, however, the announcement also emphasizes that these maximum sentences are ¡°only for reference and any verdict on the defendant will be decided by the judge.¡±

Red Star News reporter Deng Shuyi

The editor package.