A former quantitative trader has been arrested and indicted on charges of theft and attempted theft of trade secrets from a global quantitative firm, the U.S. Attorney's Office for the Southern District of New York announced today. The trader, identified as Cheuk Fung Richard Ho, allegedly schemed to steal trade secrets from his former employer, referred to as Firm-1, to benefit his own newly established trading firm, and is now facing up to 10 years in prison if convicted, divulged a U.S. Department of Justice report.
Acting U.S. Attorney Edward Y. Kim, in cooperation with the FBI, detailed the two-year span between July 2019 and August 2021, during which Ho was employed at the victimized firm, Firm-1, a leader in the competitive field of quantitative trading, besides accessing the source code, which cost the firm over a billion dollars to develop and was a vital aspect of their trading success, Ho was meant to honor confidentiality agreements as part of his role, agreements that he is now accused of having flagrantly violated in the development of his own trading strategies—and is said to have partnered with a competitor, known as Firm-3, while he was still on Firm-1's time clock.
The indictment alleges that through his access, Ho pilfered critical trade secrets, including core components of Firm-1's source code and predictive formulas essential to the firm's operations, such actions allowed Ho to swiftly commence operations at his own Firm-2, but the gig was up once Firm-1 got wind of the situation, and he began covering his tracks; Ho directed employees to erase internal communications and the development history of his firm’s source code, a directive his employees did not follow, according to a statement by the Southern District of New York.
FBI Assistant Director James E. Dennehy described the alleged theft as an abuse of a trusted position with the motive to elevate one’s own business interests improperly, he also reiterated the FBI's commitment to arresting individuals engaged in fraudulent business tactics; this sentiment was echoed by Mr. Kim, who commended the FBI's investigative effort in this case, the prosecution is currently managed by the Office’s Complex Frauds and Cybercrime Unit, led by Assistant U.S. Attorneys Rushmi Bhaskaran and Ni Qian and while the allegations remain just that—allegations, Ho stands presumed innocent until any form of guilt is proved in court.
