Trader Arrested For Stealing Trade Secrets From Global Quantitative Trading Firm

Press Release Trader Arrested For Stealing Trade Secrets From Global Quantitative Trading Firm Wednesday, January 8, 2025 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging CHEUK FUNG RICHARD HO with theft and attempted theft of trade secrets. The charges in the Indictment arise from HO’s alleged scheme to steal trade secrets from his former employer (“Firm-1”), a global quantitative trading firm. HO was arrested this morning in Los Angeles, California, and will be presented this afternoon before U.S. District Court for the Middle District of California, Magistrate Judge the Honorable Joel Richlin.Acting U.S. Attorney Edward Kim said: “As alleged, Cheuk Fung Richard Ho abused the trust his former employer placed in him and stole trade secrets to use at his own quantitative trading firm. Ho allegedly tried to cover his tracks by lying to his former employer repeatedly and asking his employees to delete evidence. Thanks to the FBI, Ho is now in custody.”FBI Assistant Director in Charge James E. Dennehy said: “Cheuk Fung Richard Ho allegedly stole and unlawfully shared private proprietary information to clandestinely develop his own firm in collaboration with his employer’s competitors. The defendant allegedly abused his trusted position by breaching company confidentiality agreements to the detriment of his former firm. The FBI will continue to apprehend any individual who attempts to garner success through manipulative and dishonest business strategies.”As alleged in the Indictment:[1]From approximately July 2019 to approximately August 2021, HO was a research developer and quantitative trader at Firm-1, a global, quantitative trading firm, which trades in equities and other securities on exchanges located in the U.S. and abroad. Firm-1’s proprietary source code (“Firm-1’s Source Code”), the development of which took years and cost Firm-1 more than one billion dollars, has been the linchpin of Firm-1’s success in these markets. During the period of HO’s employment at Firm-1, Firm-1 took substantial measures to protect the confidentiality of its Source Code. Among other things, Firm-1 limited access to Firm-1’s Source Code to only those individuals, like HO, who needed access to it in connection with the duties of their employment. Employees with access to Firm-1’s Source Code were required to enter into agreements with Firm-1 in which they acknowledged the importance of keeping Firm-1’s Source Code secret and promised to protect the confidentiality of that Source Code throughout their employment—and after their employment concluded. Firm-1 also implemented numerous physical and network security protocols to prohibit unauthorized access to Firm-1’s Source Code.In or about the spring of 2021, HO secretly started his own quantitative trading firm (“Firm-2”), which partnered with one of Firm-1’s competitors (“Firm-3”). While still employed at Firm-1, and while taking advantage of the nearly complete access to Firm-1’s Source Code afforded to him as a result of that employment, HO stole valuable trade secrets from Firm-1 (the “Stolen Trade Secrets”) for use in developing the source code for Firm-2 (“Firm-2’s Source Code”). The Stolen Trade Secrets included, among other things, some of the very building blocks of Firm-1’s Source Code, known as “Atoms,” as well as some of its predictive formulas, known as “Alphas.” By stealing these trade secrets, HO was able to quickly launch Firm-2 and begin trading successfully.Aware that he had misappropriated Firm-1’s trade secrets—and knowing that this theft would injure Firm-1—HO repeatedly lied to Firm-1 about his plans after his employment with Firm-1 concluded. For example, when Firm-1 asked HO about his post-Firm-1 employment plans, HO omitted any mention of the fact that he had started Firm-2 and he misrepresented his affiliation with Firm-3. And once Firm-1 learned that HO had started Firm-2, HO sought to destroy evidence. He directed his employees to delete their internal communications and further directed them to delete the source code history for Firm-2’s Source Code, a direction that HO’s employees did not follow.* * *HO, 36, of Los Aneles, California, is charged with one count of theft and attempted theft of trade secrets, which carries a maximum sentence of 10 years in prison.The statutory maximum sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.Mr. Kim praised the investigative work of the FBI.This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Ni Qian are in charge of the prosecution.The allegations in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase, Shelby Wratchford(212) 637-2600 Updated January 8, 2025 Topic Cybercrime Component USAO - New York, Southern Press Release Number: 25-003

Press Release Trader Arrested For Stealing Trade Secrets From Global Quantitative Trading Firm Wednesday, January 8, 2025 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging CHEUK FUNG RICHARD HO with theft and attempted theft of trade secrets. The charges in the Indictment arise from HO’s alleged scheme to steal trade secrets from his former employer (“Firm-1”), a global quantitative trading firm. HO was arrested this morning in Los Angeles, California, and will be presented this afternoon before U.S. District Court for the Middle District of California, Magistrate Judge the Honorable Joel Richlin.Acting U.S. Attorney Edward Kim said: “As alleged, Cheuk Fung Richard Ho abused the trust his former employer placed in him and stole trade secrets to use at his own quantitative trading firm. Ho allegedly tried to cover his tracks by lying to his former employer repeatedly and asking his employees to delete evidence. Thanks to the FBI, Ho is now in custody.”FBI Assistant Director in Charge James E. Dennehy said: “Cheuk Fung Richard Ho allegedly stole and unlawfully shared private proprietary information to clandestinely develop his own firm in collaboration with his employer’s competitors. The defendant allegedly abused his trusted position by breaching company confidentiality agreements to the detriment of his former firm. The FBI will continue to apprehend any individual who attempts to garner success through manipulative and dishonest business strategies.”As alleged in the Indictment:[1]From approximately July 2019 to approximately August 2021, HO was a research developer and quantitative trader at Firm-1, a global, quantitative trading firm, which trades in equities and other securities on exchanges located in the U.S. and abroad. Firm-1’s proprietary source code (“Firm-1’s Source Code”), the development of which took years and cost Firm-1 more than one billion dollars, has been the linchpin of Firm-1’s success in these markets. During the period of HO’s employment at Firm-1, Firm-1 took substantial measures to protect the confidentiality of its Source Code. Among other things, Firm-1 limited access to Firm-1’s Source Code to only those individuals, like HO, who needed access to it in connection with the duties of their employment. Employees with access to Firm-1’s Source Code were required to enter into agreements with Firm-1 in which they acknowledged the importance of keeping Firm-1’s Source Code secret and promised to protect the confidentiality of that Source Code throughout their employment—and after their employment concluded. Firm-1 also implemented numerous physical and network security protocols to prohibit unauthorized access to Firm-1’s Source Code.In or about the spring of 2021, HO secretly started his own quantitative trading firm (“Firm-2”), which partnered with one of Firm-1’s competitors (“Firm-3”). While still employed at Firm-1, and while taking advantage of the nearly complete access to Firm-1’s Source Code afforded to him as a result of that employment, HO stole valuable trade secrets from Firm-1 (the “Stolen Trade Secrets”) for use in developing the source code for Firm-2 (“Firm-2’s Source Code”). The Stolen Trade Secrets included, among other things, some of the very building blocks of Firm-1’s Source Code, known as “Atoms,” as well as some of its predictive formulas, known as “Alphas.” By stealing these trade secrets, HO was able to quickly launch Firm-2 and begin trading successfully.Aware that he had misappropriated Firm-1’s trade secrets—and knowing that this theft would injure Firm-1—HO repeatedly lied to Firm-1 about his plans after his employment with Firm-1 concluded. For example, when Firm-1 asked HO about his post-Firm-1 employment plans, HO omitted any mention of the fact that he had started Firm-2 and he misrepresented his affiliation with Firm-3. And once Firm-1 learned that HO had started Firm-2, HO sought to destroy evidence. He directed his employees to delete their internal communications and further directed them to delete the source code history for Firm-2’s Source Code, a direction that HO’s employees did not follow.* * *HO, 36, of Los Aneles, California, is charged with one count of theft and attempted theft of trade secrets, which carries a maximum sentence of 10 years in prison.The statutory maximum sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.Mr. Kim praised the investigative work of the FBI.This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Ni Qian are in charge of the prosecution.The allegations in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase, Shelby Wratchford(212) 637-2600 Updated January 8, 2025 Topic Cybercrime Component USAO - New York, Southern Press Release Number: 25-003