SEC v. LAWRENCE BILLIMEK; and ALAN WILLIAMS, No. 1:22-cv-10542, Southern District of New York (Dec. 20, 2022) — Complaint

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GREGORY A. KASPER
[email protected]
TERRY MILLER (pro hac vice application forthcoming)
[email protected]
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17
th
 Floor
Denver, Colorado 80294
(303) 844-1000

UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,

    Plaintiff,

                        v.

LAWRENCE BILLIMEK, and
ALAN WILLIAMS,

                                                Defendants.

22-cv-10542

ECF CASE
JURY TRIAL DEMANDED

COMPLAINT

Plaintiff United States Securities and Exchange Commission (the “SEC”), for its
Complaint against Defendants Lawrence Billimek and Alan Williams, alleges as follows:
SUMMARY
1. This case involves an insider trading and front-running scheme by Defendants
Billimek and Williams. For over six years, Williams unlawfully traded hundreds of securities
based on material nonpublic information that Billimek unlawfully disclosed to him. The scheme
resulted in proceeds of over $47 million.
2. Billimek is a trader at a major United States-based asset management firm (“Asset
Manager”) that routinely bought and sold securities in such large amounts that the trades caused
the price of those securities to increase or decrease in a predictable way. Billimek advised

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Williams of these market-moving trades prior to their execution and Williams traded to take
advantage of the expected price change.
3. Between September 2016 and August 15, 2022, Williams used two brokerage
accounts (“Williams Accounts”) to trade in the same securities, on the same day, as the Asset
Manager, trading prior to the Asset Manager or while multiple large orders were being placed by
the Asset Manager. The Williams Accounts’ positions were closed after the Asset Manager
traded a large quantity of stock and the price of the security moved as expected. This scheme
generated millions of dollars of illegal profits. Williams transferred at least $540,000 to a bank
account owned by Billimek during this time period.
4. As detailed below, the scheme involved timely communications from Billimek to
Williams, followed by Williams opening positions in the same securities as the Asset Manager,
and then Williams closing out his positions in the securities traded by the Asset Manager.
5. In violation of his duty to the Asset Manager, Billimek provided Williams with
information about the impending trades by his employer that he knew, consciously avoided
knowing, or was reckless in not knowing was material nonpublic information and that Williams
intended to trade on it. Williams knew, consciously avoided knowing, or was reckless in not
knowing that the information that Billimek provided to him was material nonpublic information
and that Billimek was providing the information in breach of a duty.
SUMMARY OF VIOLATIONS
6. By virtue of the foregoing conduct and as alleged further herein, Defendants have
violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C.
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] and Section 17(a) of the Securities
Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)].
Billimek also violated Section 17(j) of the

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Investment Company Act of 1940 (“Investment Company Act”) [15 U.S.C § 80a-17(j)] and Rules
17j-1(b)(1) and (3) thereunder [17 C.F.R.
§ 270.17j-1(b)(1) and (3)]. Unless restrained and
enjoined, Defendants will continue to violate the federal securities laws.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
7. The SEC brings this action pursuant to authority conferred upon it by Exchange
Act Section 21(d) [15 U.S.C. § 78u(d)], Securities Act Sections 20(b) and (d) [15 U.S.C. § 77t(b)
and (d)], and Investment Company Act Section 44 [15 U.S.C. § 80a-43].
8. The SEC seeks a final judgment: (a) permanently enjoining Defendants from
violating the federal securities laws and rules this Complaint alleges they have violated;
(b) ordering Defendants to disgorge any ill-gotten gains they received with prejudgment interest
thereon; (c) ordering Defendants to pay civil money penalties pursuant to Exchange Act Section
21A [15 U.S.C. § 78u-1] or 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Securities Act Section 20(d)
[15 U.S.C. § 77t(d)] and Investment Company Act Section 49 [15 U.S.C § 80a-48]; and (d)
ordering any other and further relief the Court may deem just and proper.
JURISDICTION AND VENUE
9. This Court has jurisdiction over this action pursuant to and Exchange Act
Sections 21(d) and 27 [15 U.S.C. §§ 78u(d) and 78aa], Securities Act Sections 20(b), 20(d) and
22 [15 U.S.C. §§ 77t(b), 77t(d), and 77v], and Investment Company Act Section 44 [15 U.S.C.
§ 80a-43].
10. Venue is proper in this district pursuant to Exchange Act Section 27(a) [15 U.S.C.
§ 78aa(a)], Securities Act Section 22(a) [15 U.S.C. § 77v(a)], and Investment Company Act
Section 44 [15 U.S.C. § 80a-43]. Certain of the acts, practices, transactions, and courses of
business alleged in this Complaint occurred within this district. Certain of the securities involved

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in this scheme are traded on exchanges located within this district. In addition, the Asset
Manager has its headquarters in this district.
DEFENDANTS
11. Williams, age 77, is a United States citizen and a resident of West Linn, Oregon.
Williams began working in the securities industry in 1971 and previously worked for a number
of financial industry businesses as a trader and/or registered representative. He also obtained
Series 1, 7, and 55 securities licenses.
12. Billimek, age 51, is a United States citizen and has residences in a number of
locations, including Hailey, Idaho, Bend, Oregon, and Hanalei, Hawaii. Billimek is an equity
trader for the Asset Manager who places trades on behalf of the Asset Manager’s client accounts
and as such he is associated with a registered investment adviser. He was formerly employed by
a number of financial industry firms.
RELEVANT ENTITY
13. Asset Manager is headquartered in New York, New York and is a registered
investment adviser. It provides investment management services to eight advisory client funds
(“Funds”), each one of which is an investment company, and places trades in the Funds’
brokerage accounts (“Fund Accounts”). It manages approximately $283 billion in discretionary
client assets.
FACTUAL ALLEGATIONS
I. Billimek Had Access to the Asset Manager’s Material Nonpublic Information.
14. The Asset Manager provides portfolio management services to eight Funds and
each Fund has one or more Fund Accounts. Fund Accounts invest in securities using a variety of
investment strategies. Because of the size of the Funds’ portfolios, trades intended to achieve the

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goals of their investment strategies can be very large and some of those trades impact the price of
the stocks that the Asset Manager is buying or selling for the Funds.
15. Billimek has been an equity trader at the Asset Manager since 2012. As an equity
trader, Billimek’s job responsibilities include routing orders based on trading decisions made by
the Asset Manager’s portfolio managers on behalf of the Funds to broker-dealers for trade
execution. As part of this work, he has access to information about the Asset Manager’s planned
trades for the Funds.
16. Information about the upcoming trades of the Asset Manager was material
nonpublic information because the Asset Manager managed portfolios worth billions of dollars,
and its trades were often of a significant volume that the trades impacted the price and supply or
demand of the security being traded.
II. Billimek Was Obliged to Keep Material Nonpublic Information Confidential.
17. Upon information and belief, throughout the relevant period, Billimek was an
“Access Person” of the Asset Manager under its code of ethics. The term “Access Person”
includes people who have access to nonpublic information regarding the purchase or sale of
securities by funds for which the Asset Manager serves as an investment adviser.
18. The Asset Manager’s code of ethics prohibited Access Persons, such as Billimek,
from engaging in front-running or misusing material nonpublic information.
19. For example, in relevant part, the Asset Manager’s code of ethics from August
2016 stated the following regarding front-running: “Access Persons are prohibited from ‘front
running’ (e.g., purchasing or selling securities for personal, Fund, or Client Account while
having knowledge of a Fund’s or Client Account’s trading positions or plans).” The Asset
Manager’s code of ethics also prohibited Access Persons from “disclosing material, nonpublic

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information regarding ... transactions of any Funds or Client Accounts ... to any person outside
of [the Asset Manager].”
20. Throughout the relevant period, as an employee of the Asset Manager and in his
role as an equity trader, Billimek was subject to the Asset Manager’s code of ethics.
21. At all relevant times, Billimek owed a duty of trust and confidence to his
employer, the Asset Manager, to maintain the confidentiality of the Asset Manager’s material
nonpublic information and to refrain from disclosing such information to others outside of the
Asset Manager.
III. The Trading Scheme
22. “Front-running” in the securities markets involves trading ahead of large, non-
public orders of market participants to benefit from the market impact of those large orders.
Large orders can have an impact on the price of a security when they cause an imbalance in the
supply or demand for that security, thereby causing the price of that security to increase or
decrease.
23. Starting in approximately September 2016, the Defendants perpetrated a lucrative
front-running scheme in the Williams Accounts by executing same day trades ahead of hundreds
of large securities trades in the Funds Accounts.
24. To obtain the lucrative and illicit profits, Billimek communicated to Williams that
the Asset Manager planned to purchase or sell large quantities of a specific stock. Based on this
material nonpublic information, Williams bought or sold the same stock in the Williams
Accounts before the Asset Manager made the trade or during the time when tranches of large
orders were being executed by the Asset Manager and before those orders impacted the market
price of the specific stock. Then, shortly after the Asset Manager’s trades were executed and the

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price of the security reacted as expected, Williams closed out his just-established positions in the
Williams Accounts, nearly always at a profit.
A. Billimek Provided Williams with Material Nonpublic Information.
25. Since at least August 2016, Williams and Billimek have communicated with each
other using cell phones that are registered in their names with their mobile service providers.
26. Additionally, for at least the period of December 2020 through April 1, 2022,
Williams, using a cell phone registered in his name, communicated frequently with a Boost
Mobile pre-paid cell phone (“Pre-paid Phone 1” or “PP1”) at or shortly before the time at which
trades were placed in the Williams Accounts.
27. Between January 21, 2018 and May 26, 2021, a Google account associated with
Billimek searched for Boost Mobile 22 times. In close proximity to some of those searches, the
Google account searched for the zip code in Lenexa, Kansas, which is the city where the billing
address for Pre-paid Phone 1 is located.
28. The account for Pre-paid Phone 1 was established by its user on or about August
30, 2016, shortly before the front-running scheme began.
29. Pre-paid Phone 1 was used principally to communicate with Williams. Between
November 1, 2021 and April 1, 2022, Pre-paid Phone 1 sent 1,465 outgoing text messages, with
1,460 of those text messages (99.66%) going to Williams.
30. The last communication between Pre-paid Phone 1 and Williams occurred on
Friday, April 1, 2022.
31. On March 22, 2022, Pre-paid Phone 1 exchanged four text messages with a
different pre-paid cell phone (“Pre-paid Phone 2” or “PP2”). On April 1, 2022, Pre-paid Phone 1
exchanged five additional text messages with Pre-paid Phone 2.

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32. Starting on Monday, April 4, 2022, Pre-paid Phone 2 and Williams began
communicating via text message. Williams continued to communicate via text messages with
Pre-paid Phone 2 until August 19, 2022. Between April 4, 2022 and August 19, 2022, Williams
communicated frequently with Pre-paid Phone 2 shortly before trades were placed in the
Williams Accounts.
33. During at least the period of October 18, 2022 through November 14, 2022, Pre-
paid Phone 2 was regularly in approximately the same location as a mobile phone registered to
Billimek.
34. Pre-paid Phones 1 and 2 were used by Billimek to communicate with Williams to
carry out a scheme in which Billimek repeatedly tipped Williams with material nonpublic
information about the Fund Accounts’ impending trades in violation of the duty that Billimek
owed the Asset Manager.
B. Williams Traded on that Material Nonpublic Information.
35. Williams used two brokerage accounts over which he exercised control to place
trades based on the material nonpublic information he received from Billimek. One of the
Williams Accounts, which Williams opened in 2003, was held in Williams own name, while the
other, which Williams opened in 2006, was held in the name of The Alan G Williams Income
Trust, a trust for which Williams was both the beneficiary and trustee. The same Internet
Protocol address used to regularly access the Williams Accounts was also used to access an
email account in Williams’ name. Furthermore, funds were transferred from the Williams
Accounts to bank accounts in Williams’ name.

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36. Williams traded in the Williams Accounts after receiving from Billimek the
material nonpublic information about trades that would be placed by the Asset Manager on
behalf of the Fund Accounts.
37. Examples of the trading activity in the Williams Accounts are alleged in
paragraphs 38 through 53 below:
July 8, 2022 Trading in Company A
38. Company A is a California-based beverage company whose common stock is
listed on the Nasdaq Stock Market, LLC.
39. On July 8, 2022, Williams front-ran the Fund Accounts’ trading in the common
stock of Company A multiple times in the same day in the following pattern: (i) Williams first
communicated with Pre-paid Phone 2, (ii) Williams then purchased shares of Company A before
(i.e., in front of) the Fund Accounts purchased shares of Company A, (iii) Williams
communicated again with Pre-paid Phone 2, and (iv) Williams locked in illicit profits by selling
the Company A shares shortly after the Fund Accounts purchased the same shares:
TIME (ET) EVENT
9:58 AM – 9:59 AM
Text
Williams and PP2 exchanged texts
10:00 AM – 10:32 AM
Trade
Williams bought 69,000 Company A shares
10:19 AM – 10:33 AM
Text
Williams and PP2 exchanged texts
10:35 AM – 10:43 AM
Trade
The Fund Accounts bought at least 64,343 Company A
shares
10:43 AM
Text
Williams and PP2 exchanged texts
10:43 AM
Trade
Williams sold 69,000 Company A shares

TIME (ET) EVENT
12:52 PM
Text
Williams and PP2 exchanged texts
12:54 PM – 1:29 PM
Trade
Williams bought 57,000 Company A shares
1:19 PM – 1:29 PM
Text
Williams and PP2 exchange texts
1:29 PM – 1:32 PM
Trade
The Fund Accounts bought at least 70,838 Company A
shares
1:31 PM
Text
Williams texted PP2
1:32 PM
Trade
Williams sold 57,000 Company A shares
1:33 PM – 1:35 PM
Text
Williams and PP2 exchanged texts

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TIME (ET) EVENT
2:14 PM
Text
Williams and PP2 exchanged texts
2:16 PM – 3:34 PM
Trade
Williams bought 40,000 Company A shares
3:16 PM – 3:36 PM
Text
Williams and PP2 exchanged texts
3:36 PM – 3:40 PM
Trade
The Fund Accounts bought at least 78,402 Company A
shares
3:37 PM – 3:40 PM
Text
Williams and PP2 exchanged texts
3:40 PM
Trade
Williams sold 40,000 Company A shares
40. As a result of Williams’ July 8, 2022 trading in Company A’s securities, he
realized profits of approximately $169,900.
February 4, 2022 Trading in Company B
41. Company B is a Connecticut-based travel-related company whose common stock
is listed on the Nasdaq Stock Market, LLC.
42. On February 4, 2022, Williams front-ran the Fund Accounts’ trading in the
common stock of Company B twice in the same day in the following pattern: (i) Williams first
communicated with Pre-paid Phone 1, (ii) Williams then purchased shares of Company B before
(i.e., in front of) the Fund Accounts purchased shares of Company B, (iii) Williams
communicated again with Pre-paid Phone 1, and (iv) Williams locked in illicit profits by selling
the Company B shares shortly after the Fund Accounts purchased the same shares:
TIME (ET) EVENT
12:15 PM – 12:16 PM
Text
Williams and PP1 exchanged texts
12:16 PM
Trade
The Fund Accounts bought 2 Company B shares
12:17 PM – 12:18 PM
Text
Williams and PP1 exchanged texts
12:20 PM – 1:30 PM
Trade
Williams bought 4,613 Company B shares
12:33 PM – 1:41 PM
Trade
The Fund Accounts bought at least 13,534 Company B
shares
1:38 PM – 1:39 PM
Text
Williams and PP1 exchanged texts
1:40 PM – 1:41 PM
Trade
Williams sold 4,613 Company B shares

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TIME (ET) EVENT
1:41 PM
Text
Williams and PP1 exchanged texts
2:12 PM – 2:49 PM
Trade
Williams bought 2,700 Company B shares
2:55 PM – 2:57 PM
Text
Williams and PP1 exchanged texts
2:57 PM – 2:58 PM
Trade
The Fund Accounts bought at least 9,488 Company B
shares
2:58 PM
Text
Williams texted PP1
2:58 PM
Trade
Williams sold 2,700 Company B shares
2:59 PM
Text
Williams and PP1 exchanged texts
43. As a result of Williams’ February 4, 2022 trading in Company B’s securities, he
realized profits of approximately $183,200.
May 21, 2021 Trading in Company C
44. Company C is a California-based producer of technology platforms, whose
common stock is listed on the New York Stock Exchange.
45. On May 21, 2021, Williams front-ran the Fund Accounts’ trading in the common
stock of Company C in patterns similar to those alleged above with respect to Company A and
Company B:
TIME (Eastern Time) EVENT
9:39 AM – 9:41 AM
Text
Williams and PP1 exchanged texts
9:41 AM – 9:56 AM
Trade
Williams bought 11,000 Company C shares
10:04 AM
Text
PP1 texted Williams
10:04 AM - 10:06 AM
Trade
The Fund Accounts bought at least 14,191 Company C
shares
10:05 AM - 10:06 AM
Trade
Williams sold 11,000 Company C shares

TIME (Eastern Time) EVENT
10:15 AM
Text
PP1 texted Williams
10:15 AM
Trade
Williams bought 2,000 Company C shares
10:16 AM – 10:19 AM
Text
Williams and PP1 exchanged texts
10:20 AM – 11:05 AM
Trade
Williams bought 35,000 Company C shares
11:06 AM – 11:09 AM
Text
Williams and PP1 exchanged texts
10:15 AM – 11:09 AM
Trade
The Fund Accounts bought at least 69,756 Company C
shares
11:09 AM
Trade
Williams sold 37,000 Company C shares

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TIME (Eastern Time) EVENT
12:24 PM – 12:27 PM
Text
Williams and PP1 exchanged texts
12:28 PM – 12:49 PM
Trade
Williams bought 13,000 Company C shares
12:50 PM – 12:54 PM
Text
Williams and PP1 exchanged texts
12:54 PM – 12:58 PM
Trade
The Fund Accounts bought  at least 13,493 Company C
shares
12:55 PM
Text
Williams texted PP1
12:58 PM
Trade
Williams sold 13,000 Company C shares
46. As a result of Williams’ May 21, 2021 trading in Company C’s securities, he
realized profits of approximately $154,174.
April 2, 2020 Trading in Company D
47. Company D is a Canadian-based apparel company, whose common stock is listed
on the Nasdaq Global Select Market.
48. On April 2, 2020, Williams front-ran the Fund Accounts’ trading in the common
stock of Company D by purchasing Company D shares before the Fund Accounts purchased
Company D shares, and then selling those shares shortly after the Fund Accounts purchased
Company D shares:
TIME (ET) TRADES
10:58 AM – 11:28 AM Williams bought 20,000 Company D shares
10:54 AM – 11:35 AM The Fund Accounts bought at least 48,024 Company D shares
11:35 AM  Williams sold 20,000 Company D shares
12:15 PM – 12:50 PM Williams bought 20,000 Company D shares
12:24 PM – 12:54 PM  The Fund Accounts bought at least 20,243 Company D shares
12:53 PM – 12:54 PM Williams sold 20,000 Company D shares
49. As a result of Williams’ April 2, 2020 trading in Company D’s securities, he
realized profits of approximately $48,600.
October 25, 2016 Trading in Company E
50. Company E is a China-based technology company whose common stock is listed
on the Nasdaq Global Services.

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51. On October 25, 2016, Williams front-ran the Fund Accounts’ trading in the
common stock of Company E by selling short Company E shares before the Fund Accounts sold
Company E shares and then purchasing Company E shares to cover the short position shortly
after the Fund Accounts purchased Company E shares.
TIME (ET) TRADES
10:21 AM – 10:27 AM Williams sold short 15,000 Company E shares
10:31 AM – 10:33 AM The Fund Accounts sold at least 18,477 Company E shares
10:32 AM – 10:33 AM Williams bought 15,000 Company E shares to cover his short
position
11:56 AM – 12:23 PM Williams sold short 17,000 Company E shares
12:24 PM – 12:25 PM The Fund Accounts sold at least 48,012 Company E shares
12:25 PM – 12:27 PM Williams bought 17,000 Company E shares to cover the short
position
52. As a result of Williams’ October 25, 2016 trading in the securities of Company E,
he realized profits of approximately $18,200.
53. From at least September 2016 through at least August 15, 2022, Williams traded
in this manner, front-running trading in the Fund Accounts in the securities of hundreds of public
companies.
C. Trading Success and Profits
54. The Williams Accounts were extraordinarily successful when trading in the same
securities, and on the same days, as the Funds Accounts. That success is neither an accident nor
random, but instead is the result of the Defendants improperly using the Asset Manager’s
material nonpublic information for their benefit.
55. A trader’s “dollar-weighted win rate” is the proportion of the trader’s investment
dollars associated with profitable outcomes.  For example, if a trader invested $1 million, and
$900,000 of the investments were associated with profitable outcomes, the dollar-weighted win
rate would be 90%.

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56. Prior to September 2016, when the scheme began, the Williams Accounts’ dollar-
weighted win rate fluctuated from month-to-month from less than 20% to over 70%.
57. Starting in September 2016, the Williams Accounts’ dollar-weighted win-rate
increased dramatically, and remained mostly above 90% for all months thereafter, as
demonstrated below.

58. The Williams Accounts placed intraday roundtrip stock trades as part of the
scheme alleged in this Complaint, which entails opening a stock position (through either a
purchase or short sale) during the trading day and closing that position in the same trading day.
59. During the period of September 2016 through August 15, 2022, the Williams
Accounts initiated intraday roundtrip stock trades in 1,697 unique combinations where: (i ) the
Fund Accounts traded in the same symbol on the same date and in the same direction and
(ii) where the Williams Accounts opened their position prior to and closed their position after
trades in the Funds Accounts.

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60. The Williams Accounts opened their position before large trades made by the
Fund Accounts occurred, and the Williams Accounts closed their position after large trades made
by the Funds Accounts had a chance to impact the market.
61. When the Fund Accounts traded and the Williams Accounts opened an intraday
roundtrip trade in the same security, the opening trade in the Williams Accounts was highly
correlated with the direction of Fund Accounts’ trades. The odds that the significant overlap of
trading in the Williams Accounts with trading by the Fund Accounts occurred by random chance
is less than one-in-a-trillion.
62. Williams made profits of at least $47.3 million from his trades that correlated with
the Fund Accounts’ trades.
63. The Defendants intended for the Williams Accounts to benefit from the short-
term market impact of large orders executed in the Fund Accounts. The correlation between the
Williams Accounts trading and trading of the Funds Accounts supports this intent, as does the
Williams Accounts’ win rate (97%) and profits ($47.3 million) on trades that overlapped with the
Funds Accounts.
IV. Money Transfers
64. Since September 2016, more than $34 million has been transferred from the
Williams Accounts to U.S.-based bank accounts in Williams’ name.
65. Between September 2016 and April 2017, Williams transferred at least $540,000
to a bank account owned by Billimek.
V. The Defendants Acted Knowingly, Recklessly, and their Conduct was Negligent.
66. Billimek knew, consciously avoided knowing, or was reckless in not knowing that
the information he tipped was material and nonpublic and that he was breaching his duty to the

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Asset Manager by disclosing material nonpublic information to Williams. Billimek also knew,
consciously avoided knowing, or was reckless in not knowing that the information he
communicated to Williams would be used for trading.
67. Billimek received a personal benefit from his tips of material nonpublic
information to Williams, including payments of at least $540,000 from Williams.
68. Williams front-ran the Fund Accounts’ trading in numerous securities based on
material nonpublic information that he received from Billimek that Williams knew, consciously
avoided knowing, or was reckless in not knowing that Billimek disclosed to him in breach of a
duty of trust and confidence for a personal benefit.
69. Williams knew, consciously avoided knowing, or was reckless in not knowing
that the information was material and nonpublic.
70. In addition, for purposes of claims alleged herein that can be satisfied with a
showing that their conduct was negligent, Billimek’s and Williams’s conduct was also negligent
because they failed to exercise ordinary or reasonable care when engaging in deceptive conduct.
No reasonable person would have repeatedly provided or received and traded on the information
about trades that would be placed on behalf of the Fund Accounts in the manner described
above.
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder
(Against both Defendants)

71. The SEC realleges and incorporates by reference each and every allegation in
paragraphs 1 through 70, as though fully set forth herein.
72. By virtue of the foregoing, Defendants, singly or in concert with others, in
connection with the purchase or sale of securities, by the use of the means or instrumentalities of

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interstate commerce, or of the mails, or a facility of a national securities exchange, directly or
indirectly: (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of
material fact or omitted to state material facts necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading; or (c) engaged in
acts, practices, or courses of business which operated or would have operated as a fraud or deceit
upon persons. By virtue of the foregoing, Defendants, directly or indirectly, violated, and unless
enjoined, will again violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF
Violations of Securities Act Sections 17(a)
(Against both Defendants)

73. The SEC realleges and incorporates by reference each and every allegation in
paragraphs 1 through 70, as though fully set forth herein.
74. By virtue of the foregoing, Defendants, singly or in concert with others, in
connection with the offer or sale of securities, by the use of the means or instrumentalities of
interstate commerce, or of the mails, or a facility of a national securities exchange, directly or
indirectly: (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of
material fact or omitted to state material facts necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading; or (c) engaged in
acts, practices, or courses of business which operated or would have operated as a fraud or deceit
upon persons. By virtue of the foregoing, Defendants, directly or indirectly, violated, and unless
enjoined, will again violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a))].

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THIRD CLAIM FOR RELIEF
Violations of Investment Company Act Section 17(j) and Rule 17j-1(b)(1) and (3)
(Against Billimek)

75. The SEC realleges and incorporates by reference each and every allegation in
paragraphs 1 through 70, as though fully set forth herein.
76. By engaging in the conduct described above, Billimek, an affiliated person of an
investment adviser, that is, the Asset Manager, of certain registered investment companies, in
connection with the purchase or sale, directly and indirectly, of a security held or to be acquired
by registered investment companies advised by those registered investment companies, has:
(a) employed devices, schemes and artifices to defraud those registered investment companies;
and (b) engaged in acts, practices or courses of business that operates or would operate as a fraud
and deceit on those registered investment companies.
77. By reason of the foregoing acts and practices, Billimek violated and, unless
enjoined, will continue to violate Section 17(j) of the Investment Company Act [15 U.S.C. §
80a-17] and Rule 17j-1(b)(1) and (3) [17 C.F.R. § 270.17j-1(b)(1) and (3)] thereunder.
PRAYER FOR RELIEF
WHEREFORE, the SEC requests that the Court:
I.
Find the Defendants violated the securities laws and rules promulgated thereunder as
alleged against them;
II.
Enter an injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil
Procedure, permanently restraining and enjoining Defendants from violating the laws and rules
they are alleged to have violated;

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II  I.
Order Defendants and Relief Defendants to disgorge all of the ill-gotten gains from the
violations alleged in this Complaint, and order them to pay prejudgment interest thereon;
IV.
Order Defendants to pay civil money penalties pursuant to Exchange Act Section 21A
[15 U.S.C § 78u-1], or Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Securities
Act Section 20(d) [15 U.S.C. § 77t(d)], and Investment Company Act Section 49 [15 U.S.C. §
80a-48] and;
V.
Retain jurisdiction over this action to implement and carry out the terms of all orders and
decrees that may be entered; and
V.
Grant any other and further relief as the Court deems just and proper.
DEMAND FOR A JURY TRIAL
The SEC demands a trial by jury on all claims so triable.

Dated:  December 14, 2022

Respectfully submitted,

_________________________________________
Gregory A. Kasper (NY 2735405; SDNY GK6596)
Terry R. Miller (pro hac vice application forthcoming)
SECURITIES AND EXCHANGE COMMISSION
Denver Regional Office
1961 Stout Street, 17
th
 Floor
Denver, Colorado 80294
(303) 844-1000
[email protected]
[email protected]

1 
 

GREGORY A. KASPER 
[email protected]  
TERRY MILLER (pro hac vice application forthcoming) 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 
 

UNITED STATES DISTRICT COURT FOR THE 
SOUTHERN DISTRICT OF NEW YORK 

 
 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION, 
 
    Plaintiff, 
 
  v. 
 
LAWRENCE BILLIMEK, and 
ALAN WILLIAMS, 
 
    Defendants.  
 
 
 

 
 
 

22-cv-10542 
 

ECF CASE 
JURY TRIAL DEMANDED 

 
 
 

COMPLAINT 
 
 

 
 

Plaintiff United States Securities and Exchange Commission (the “SEC”), for its 

Complaint against Defendants Lawrence Billimek and Alan Williams, alleges as follows: 

SUMMARY  

1. This case involves an insider trading and front-running scheme by Defendants 

Billimek and Williams. For over six years, Williams unlawfully traded hundreds of securities 

based on material nonpublic information that Billimek unlawfully disclosed to him. The scheme 

resulted in proceeds of over $47 million.  

2. Billimek is a trader at a major United States-based asset management firm (“Asset 

Manager”) that routinely bought and sold securities in such large amounts that the trades caused 

the price of those securities to increase or decrease in a predictable way. Billimek advised 

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Williams of these market-moving trades prior to their execution and Williams traded to take 

advantage of the expected price change.  

3. Between September 2016 and August 15, 2022, Williams used two brokerage 

accounts (“Williams Accounts”) to trade in the same securities, on the same day, as the Asset 

Manager, trading prior to the Asset Manager or while multiple large orders were being placed by 

the Asset Manager. The Williams Accounts’ positions were closed after the Asset Manager 

traded a large quantity of stock and the price of the security moved as expected. This scheme 

generated millions of dollars of illegal profits. Williams transferred at least $540,000 to a bank 

account owned by Billimek during this time period. 

4. As detailed below, the scheme involved timely communications from Billimek to 

Williams, followed by Williams opening positions in the same securities as the Asset Manager, 

and then Williams closing out his positions in the securities traded by the Asset Manager. 

5. In violation of his duty to the Asset Manager, Billimek provided Williams with 

information about the impending trades by his employer that he knew, consciously avoided 

knowing, or was reckless in not knowing was material nonpublic information and that Williams 

intended to trade on it. Williams knew, consciously avoided knowing, or was reckless in not 

knowing that the information that Billimek provided to him was material nonpublic information 

and that Billimek was providing the information in breach of a duty.  

SUMMARY OF VIOLATIONS 

6. By virtue of the foregoing conduct and as alleged further herein, Defendants have 

violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] and Section 17(a) of the Securities 

Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]. Billimek also violated Section 17(j) of the 

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Investment Company Act of 1940 (“Investment Company Act”) [15 U.S.C § 80a-17(j)] and Rules 

17j-1(b)(1) and (3) thereunder [17 C.F.R. § 270.17j-1(b)(1) and (3)]. Unless restrained and 

enjoined, Defendants will continue to violate the federal securities laws. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

7. The SEC brings this action pursuant to authority conferred upon it by Exchange 

Act Section 21(d) [15 U.S.C. § 78u(d)], Securities Act Sections 20(b) and (d) [15 U.S.C. § 77t(b) 

and (d)], and Investment Company Act Section 44 [15 U.S.C. § 80a-43]. 

8. The SEC seeks a final judgment: (a) permanently enjoining Defendants from 

violating the federal securities laws and rules this Complaint alleges they have violated; 

(b) ordering Defendants to disgorge any ill-gotten gains they received with prejudgment interest 

thereon; (c) ordering Defendants to pay civil money penalties pursuant to Exchange Act Section 

21A [15 U.S.C. § 78u-1] or 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)] and Investment Company Act Section 49 [15 U.S.C § 80a-48]; and (d) 

ordering any other and further relief the Court may deem just and proper. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to and Exchange Act 

Sections 21(d) and 27 [15 U.S.C. §§ 78u(d) and 78aa], Securities Act Sections 20(b), 20(d) and 

22 [15 U.S.C. §§ 77t(b), 77t(d), and 77v], and Investment Company Act Section 44 [15 U.S.C. 

§ 80a-43]. 

10. Venue is proper in this district pursuant to Exchange Act Section 27(a) [15 U.S.C. 

§ 78aa(a)], Securities Act Section 22(a) [15 U.S.C. § 77v(a)], and Investment Company Act 

Section 44 [15 U.S.C. § 80a-43]. Certain of the acts, practices, transactions, and courses of 

business alleged in this Complaint occurred within this district. Certain of the securities involved 

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in this scheme are traded on exchanges located within this district. In addition, the Asset 

Manager has its headquarters in this district. 

DEFENDANTS 

11. Williams, age 77, is a United States citizen and a resident of West Linn, Oregon. 

Williams began working in the securities industry in 1971 and previously worked for a number 

of financial industry businesses as a trader and/or registered representative. He also obtained 

Series 1, 7, and 55 securities licenses.  

12. Billimek, age 51, is a United States citizen and has residences in a number of 

locations, including Hailey, Idaho, Bend, Oregon, and Hanalei, Hawaii. Billimek is an equity 

trader for the Asset Manager who places trades on behalf of the Asset Manager’s client accounts 

and as such he is associated with a registered investment adviser. He was formerly employed by 

a number of financial industry firms.  

RELEVANT ENTITY 

13. Asset Manager is headquartered in New York, New York and is a registered 

investment adviser. It provides investment management services to eight advisory client funds 

(“Funds”), each one of which is an investment company, and places trades in the Funds’ 

brokerage accounts (“Fund Accounts”). It manages approximately $283 billion in discretionary 

client assets.  

FACTUAL ALLEGATIONS 

I. Billimek Had Access to the Asset Manager’s Material Nonpublic Information.  

14. The Asset Manager provides portfolio management services to eight Funds and 

each Fund has one or more Fund Accounts. Fund Accounts invest in securities using a variety of 

investment strategies. Because of the size of the Funds’ portfolios, trades intended to achieve the 

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goals of their investment strategies can be very large and some of those trades impact the price of 

the stocks that the Asset Manager is buying or selling for the Funds.  

15. Billimek has been an equity trader at the Asset Manager since 2012. As an equity 

trader, Billimek’s job responsibilities include routing orders based on trading decisions made by 

the Asset Manager’s portfolio managers on behalf of the Funds to broker-dealers for trade 

execution. As part of this work, he has access to information about the Asset Manager’s planned 

trades for the Funds. 

16. Information about the upcoming trades of the Asset Manager was material 

nonpublic information because the Asset Manager managed portfolios worth billions of dollars, 

and its trades were often of a significant volume that the trades impacted the price and supply or 

demand of the security being traded.  

II. Billimek Was Obliged to Keep Material Nonpublic Information Confidential. 

17. Upon information and belief, throughout the relevant period, Billimek was an 

“Access Person” of the Asset Manager under its code of ethics. The term “Access Person” 

includes people who have access to nonpublic information regarding the purchase or sale of 

securities by funds for which the Asset Manager serves as an investment adviser.  

18. The Asset Manager’s code of ethics prohibited Access Persons, such as Billimek, 

from engaging in front-running or misusing material nonpublic information.  

19. For example, in relevant part, the Asset Manager’s code of ethics from August 

2016 stated the following regarding front-running: “Access Persons are prohibited from ‘front 

running’ (e.g., purchasing or selling securities for personal, Fund, or Client Account while 

having knowledge of a Fund’s or Client Account’s trading positions or plans).” The Asset 

Manager’s code of ethics also prohibited Access Persons from “disclosing material, nonpublic 

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information regarding … transactions of any Funds or Client Accounts … to any person outside 

of [the Asset Manager].” 

20. Throughout the relevant period, as an employee of the Asset Manager and in his 

role as an equity trader, Billimek was subject to the Asset Manager’s code of ethics.  

21. At all relevant times, Billimek owed a duty of trust and confidence to his 

employer, the Asset Manager, to maintain the confidentiality of the Asset Manager’s material 

nonpublic information and to refrain from disclosing such information to others outside of the 

Asset Manager.  

III. The Trading Scheme 

22. “Front-running” in the securities markets involves trading ahead of large, non-

public orders of market participants to benefit from the market impact of those large orders. 

Large orders can have an impact on the price of a security when they cause an imbalance in the 

supply or demand for that security, thereby causing the price of that security to increase or 

decrease. 

23. Starting in approximately September 2016, the Defendants perpetrated a lucrative 

front-running scheme in the Williams Accounts by executing same day trades ahead of hundreds 

of large securities trades in the Funds Accounts.  

24. To obtain the lucrative and illicit profits, Billimek communicated to Williams that 

the Asset Manager planned to purchase or sell large quantities of a specific stock. Based on this 

material nonpublic information, Williams bought or sold the same stock in the Williams 

Accounts before the Asset Manager made the trade or during the time when tranches of large 

orders were being executed by the Asset Manager and before those orders impacted the market 

price of the specific stock. Then, shortly after the Asset Manager’s trades were executed and the 

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price of the security reacted as expected, Williams closed out his just-established positions in the 

Williams Accounts, nearly always at a profit. 

A. Billimek Provided Williams with Material Nonpublic Information.  

25. Since at least August 2016, Williams and Billimek have communicated with each 

other using cell phones that are registered in their names with their mobile service providers.  

26. Additionally, for at least the period of December 2020 through April 1, 2022, 

Williams, using a cell phone registered in his name, communicated frequently with a Boost 

Mobile pre-paid cell phone (“Pre-paid Phone 1” or “PP1”) at or shortly before the time at which 

trades were placed in the Williams Accounts.  

27. Between January 21, 2018 and May 26, 2021, a Google account associated with 

Billimek searched for Boost Mobile 22 times. In close proximity to some of those searches, the 

Google account searched for the zip code in Lenexa, Kansas, which is the city where the billing 

address for Pre-paid Phone 1 is located.  

28. The account for Pre-paid Phone 1 was established by its user on or about August 

30, 2016, shortly before the front-running scheme began.  

29. Pre-paid Phone 1 was used principally to communicate with Williams. Between 

November 1, 2021 and April 1, 2022, Pre-paid Phone 1 sent 1,465 outgoing text messages, with 

1,460 of those text messages (99.66%) going to Williams.  

30. The last communication between Pre-paid Phone 1 and Williams occurred on 

Friday, April 1, 2022. 

31. On March 22, 2022, Pre-paid Phone 1 exchanged four text messages with a 

different pre-paid cell phone (“Pre-paid Phone 2” or “PP2”). On April 1, 2022, Pre-paid Phone 1 

exchanged five additional text messages with Pre-paid Phone 2.  

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32. Starting on Monday, April 4, 2022, Pre-paid Phone 2 and Williams began 

communicating via text message. Williams continued to communicate via text messages with 

Pre-paid Phone 2 until August 19, 2022. Between April 4, 2022 and August 19, 2022, Williams 

communicated frequently with Pre-paid Phone 2 shortly before trades were placed in the 

Williams Accounts.  

33. During at least the period of October 18, 2022 through November 14, 2022, Pre-

paid Phone 2 was regularly in approximately the same location as a mobile phone registered to 

Billimek.  

34. Pre-paid Phones 1 and 2 were used by Billimek to communicate with Williams to 

carry out a scheme in which Billimek repeatedly tipped Williams with material nonpublic 

information about the Fund Accounts’ impending trades in violation of the duty that Billimek 

owed the Asset Manager.  

B. Williams Traded on that Material Nonpublic Information. 

35. Williams used two brokerage accounts over which he exercised control to place 

trades based on the material nonpublic information he received from Billimek. One of the 

Williams Accounts, which Williams opened in 2003, was held in Williams own name, while the 

other, which Williams opened in 2006, was held in the name of The Alan G Williams Income 

Trust, a trust for which Williams was both the beneficiary and trustee. The same Internet 

Protocol address used to regularly access the Williams Accounts was also used to access an 

email account in Williams’ name. Furthermore, funds were transferred from the Williams 

Accounts to bank accounts in Williams’ name.  

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36. Williams traded in the Williams Accounts after receiving from Billimek the 

material nonpublic information about trades that would be placed by the Asset Manager on 

behalf of the Fund Accounts. 

37. Examples of the trading activity in the Williams Accounts are alleged in 

paragraphs 38 through 53 below: 

July 8, 2022 Trading in Company A 

38. Company A is a California-based beverage company whose common stock is 

listed on the Nasdaq Stock Market, LLC.   

39. On July 8, 2022, Williams front-ran the Fund Accounts’ trading in the common 

stock of Company A multiple times in the same day in the following pattern: (i) Williams first 

communicated with Pre-paid Phone 2, (ii) Williams then purchased shares of Company A before 

(i.e., in front of) the Fund Accounts purchased shares of Company A, (iii) Williams 

communicated again with Pre-paid Phone 2, and (iv) Williams locked in illicit profits by selling 

the Company A shares shortly after the Fund Accounts purchased the same shares: 

TIME (ET) EVENT 
9:58 AM – 9:59 AM Text Williams and PP2 exchanged texts 
10:00 AM – 10:32 AM Trade Williams bought 69,000 Company A shares 
10:19 AM – 10:33 AM Text Williams and PP2 exchanged texts 
10:35 AM – 10:43 AM Trade The Fund Accounts bought at least 64,343 Company A 

shares  
10:43 AM Text Williams and PP2 exchanged texts 
10:43 AM Trade Williams sold 69,000 Company A shares   

 
TIME (ET) EVENT 

12:52 PM  Text Williams and PP2 exchanged texts 
12:54 PM – 1:29 PM Trade Williams bought 57,000 Company A shares  
1:19 PM – 1:29 PM  Text Williams and PP2 exchange texts 
1:29 PM – 1:32 PM Trade The Fund Accounts bought at least 70,838 Company A 

shares 
1:31 PM Text Williams texted PP2  
1:32 PM Trade Williams sold 57,000 Company A shares 
1:33 PM – 1:35 PM Text Williams and PP2 exchanged texts 

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TIME (ET) EVENT 

2:14 PM  Text Williams and PP2 exchanged texts 
2:16 PM – 3:34 PM Trade Williams bought 40,000 Company A shares 
3:16 PM – 3:36 PM Text Williams and PP2 exchanged texts 
3:36 PM – 3:40 PM Trade The Fund Accounts bought at least 78,402 Company A 

shares 
3:37 PM – 3:40 PM Text Williams and PP2 exchanged texts 
3:40 PM Trade Williams sold 40,000 Company A shares 

40. As a result of Williams’ July 8, 2022 trading in Company A’s securities, he 

realized profits of approximately $169,900. 

February 4, 2022 Trading in Company B 

41. Company B is a Connecticut-based travel-related company whose common stock 

is listed on the Nasdaq Stock Market, LLC.  

42. On February 4, 2022, Williams front-ran the Fund Accounts’ trading in the 

common stock of Company B twice in the same day in the following pattern: (i) Williams first 

communicated with Pre-paid Phone 1, (ii) Williams then purchased shares of Company B before 

(i.e., in front of) the Fund Accounts purchased shares of Company B, (iii) Williams 

communicated again with Pre-paid Phone 1, and (iv) Williams locked in illicit profits by selling 

the Company B shares shortly after the Fund Accounts purchased the same shares: 

TIME (ET) EVENT 
12:15 PM – 12:16 PM Text Williams and PP1 exchanged texts 
12:16 PM Trade The Fund Accounts bought 2 Company B shares 
12:17 PM – 12:18 PM Text Williams and PP1 exchanged texts 
12:20 PM – 1:30 PM Trade Williams bought 4,613 Company B shares  
12:33 PM – 1:41 PM Trade The Fund Accounts bought at least 13,534 Company B 

shares  
1:38 PM – 1:39 PM Text Williams and PP1 exchanged texts 
1:40 PM – 1:41 PM Trade Williams sold 4,613 Company B shares  

 

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TIME (ET) EVENT 
1:41 PM Text Williams and PP1 exchanged texts 
2:12 PM – 2:49 PM Trade Williams bought 2,700 Company B shares  
2:55 PM – 2:57 PM Text Williams and PP1 exchanged texts 
2:57 PM – 2:58 PM Trade The Fund Accounts bought at least 9,488 Company B 

shares  
2:58 PM Text Williams texted PP1 
2:58 PM Trade Williams sold 2,700 Company B shares  
2:59 PM Text Williams and PP1 exchanged texts 

43. As a result of Williams’ February 4, 2022 trading in Company B’s securities, he 

realized profits of approximately $183,200. 

May 21, 2021 Trading in Company C 

44. Company C is a California-based producer of technology platforms, whose 

common stock is listed on the New York Stock Exchange.  

45. On May 21, 2021, Williams front-ran the Fund Accounts’ trading in the common 

stock of Company C in patterns similar to those alleged above with respect to Company A and 

Company B: 

TIME (Eastern Time) EVENT 
9:39 AM – 9:41 AM Text Williams and PP1 exchanged texts 
9:41 AM – 9:56 AM Trade Williams bought 11,000 Company C shares  
10:04 AM Text PP1 texted Williams  
10:04 AM - 10:06 AM Trade The Fund Accounts bought at least 14,191 Company C 

shares  
10:05 AM - 10:06 AM Trade Williams sold 11,000 Company C shares  

 
TIME (Eastern Time) EVENT 
10:15 AM Text PP1 texted Williams  
10:15 AM Trade Williams bought 2,000 Company C shares  
10:16 AM – 10:19 AM Text Williams and PP1 exchanged texts 
10:20 AM – 11:05 AM Trade Williams bought 35,000 Company C shares  
11:06 AM – 11:09 AM Text Williams and PP1 exchanged texts 
10:15 AM – 11:09 AM Trade The Fund Accounts bought at least 69,756 Company C 

shares  
11:09 AM Trade Williams sold 37,000 Company C shares  

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TIME (Eastern Time) EVENT 
12:24 PM – 12:27 PM Text Williams and PP1 exchanged texts 
12:28 PM – 12:49 PM Trade Williams bought 13,000 Company C shares  
12:50 PM – 12:54 PM Text Williams and PP1 exchanged texts 
12:54 PM – 12:58 PM Trade The Fund Accounts bought  at least 13,493 Company C 

shares  
12:55 PM Text Williams texted PP1 
12:58 PM Trade Williams sold 13,000 Company C shares  

46. As a result of Williams’ May 21, 2021 trading in Company C’s securities, he 

realized profits of approximately $154,174. 

April 2, 2020 Trading in Company D 

47. Company D is a Canadian-based apparel company, whose common stock is listed 

on the Nasdaq Global Select Market.  

48. On April 2, 2020, Williams front-ran the Fund Accounts’ trading in the common 

stock of Company D by purchasing Company D shares before the Fund Accounts purchased 

Company D shares, and then selling those shares shortly after the Fund Accounts purchased 

Company D shares: 

TIME (ET) TRADES 
10:58 AM – 11:28 AM Williams bought 20,000 Company D shares  
10:54 AM – 11:35 AM The Fund Accounts bought at least 48,024 Company D shares  
11:35 AM  Williams sold 20,000 Company D shares  
12:15 PM – 12:50 PM Williams bought 20,000 Company D shares  
12:24 PM – 12:54 PM  The Fund Accounts bought at least 20,243 Company D shares  
12:53 PM – 12:54 PM Williams sold 20,000 Company D shares  

49. As a result of Williams’ April 2, 2020 trading in Company D’s securities, he 

realized profits of approximately $48,600. 

October 25, 2016 Trading in Company E 

50. Company E is a China-based technology company whose common stock is listed 

on the Nasdaq Global Services.  

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13 
 

51. On October 25, 2016, Williams front-ran the Fund Accounts’ trading in the 

common stock of Company E by selling short Company E shares before the Fund Accounts sold 

Company E shares and then purchasing Company E shares to cover the short position shortly 

after the Fund Accounts purchased Company E shares.  

TIME (ET) TRADES 
10:21 AM – 10:27 AM Williams sold short 15,000 Company E shares  
10:31 AM – 10:33 AM The Fund Accounts sold at least 18,477 Company E shares  
10:32 AM – 10:33 AM Williams bought 15,000 Company E shares to cover his short 

position  
11:56 AM – 12:23 PM Williams sold short 17,000 Company E shares  
12:24 PM – 12:25 PM The Fund Accounts sold at least 48,012 Company E shares  
12:25 PM – 12:27 PM Williams bought 17,000 Company E shares to cover the short 

position  

52. As a result of Williams’ October 25, 2016 trading in the securities of Company E, 

he realized profits of approximately $18,200. 

53. From at least September 2016 through at least August 15, 2022, Williams traded 

in this manner, front-running trading in the Fund Accounts in the securities of hundreds of public 

companies.  

C. Trading Success and Profits 

54. The Williams Accounts were extraordinarily successful when trading in the same 

securities, and on the same days, as the Funds Accounts. That success is neither an accident nor 

random, but instead is the result of the Defendants improperly using the Asset Manager’s 

material nonpublic information for their benefit.  

55. A trader’s “dollar-weighted win rate” is the proportion of the trader’s investment 

dollars associated with profitable outcomes.  For example, if a trader invested $1 million, and 

$900,000 of the investments were associated with profitable outcomes, the dollar-weighted win 

rate would be 90%.    

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56. Prior to September 2016, when the scheme began, the Williams Accounts’ dollar-

weighted win rate fluctuated from month-to-month from less than 20% to over 70%.  

57. Starting in September 2016, the Williams Accounts’ dollar-weighted win-rate 

increased dramatically, and remained mostly above 90% for all months thereafter, as 

demonstrated below.  

 

58. The Williams Accounts placed intraday roundtrip stock trades as part of the 

scheme alleged in this Complaint, which entails opening a stock position (through either a 

purchase or short sale) during the trading day and closing that position in the same trading day.  

59. During the period of September 2016 through August 15, 2022, the Williams 

Accounts initiated intraday roundtrip stock trades in 1,697 unique combinations where: (i) the 

Fund Accounts traded in the same symbol on the same date and in the same direction and 

(ii) where the Williams Accounts opened their position prior to and closed their position after 

trades in the Funds Accounts.  

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60. The Williams Accounts opened their position before large trades made by the 

Fund Accounts occurred, and the Williams Accounts closed their position after large trades made 

by the Funds Accounts had a chance to impact the market. 

61. When the Fund Accounts traded and the Williams Accounts opened an intraday 

roundtrip trade in the same security, the opening trade in the Williams Accounts was highly 

correlated with the direction of Fund Accounts’ trades. The odds that the significant overlap of 

trading in the Williams Accounts with trading by the Fund Accounts occurred by random chance 

is less than one-in-a-trillion.  

62. Williams made profits of at least $47.3 million from his trades that correlated with 

the Fund Accounts’ trades.  

63. The Defendants intended for the Williams Accounts to benefit from the short-

term market impact of large orders executed in the Fund Accounts. The correlation between the 

Williams Accounts trading and trading of the Funds Accounts supports this intent, as does the 

Williams Accounts’ win rate (97%) and profits ($47.3 million) on trades that overlapped with the 

Funds Accounts.  

IV. Money Transfers 

64. Since September 2016, more than $34 million has been transferred from the 

Williams Accounts to U.S.-based bank accounts in Williams’ name.  

65. Between September 2016 and April 2017, Williams transferred at least $540,000 

to a bank account owned by Billimek. 

V. The Defendants Acted Knowingly, Recklessly, and their Conduct was Negligent. 

66. Billimek knew, consciously avoided knowing, or was reckless in not knowing that 

the information he tipped was material and nonpublic and that he was breaching his duty to the 

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Asset Manager by disclosing material nonpublic information to Williams. Billimek also knew, 

consciously avoided knowing, or was reckless in not knowing that the information he 

communicated to Williams would be used for trading.  

67. Billimek received a personal benefit from his tips of material nonpublic 

information to Williams, including payments of at least $540,000 from Williams.  

68. Williams front-ran the Fund Accounts’ trading in numerous securities based on 

material nonpublic information that he received from Billimek that Williams knew, consciously 

avoided knowing, or was reckless in not knowing that Billimek disclosed to him in breach of a 

duty of trust and confidence for a personal benefit.  

69. Williams knew, consciously avoided knowing, or was reckless in not knowing 

that the information was material and nonpublic. 

70. In addition, for purposes of claims alleged herein that can be satisfied with a 

showing that their conduct was negligent, Billimek’s and Williams’s conduct was also negligent 

because they failed to exercise ordinary or reasonable care when engaging in deceptive conduct. 

No reasonable person would have repeatedly provided or received and traded on the information 

about trades that would be placed on behalf of the Fund Accounts in the manner described 

above. 

FIRST CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder  

(Against both Defendants) 
 

71. The SEC realleges and incorporates by reference each and every allegation in 

paragraphs 1 through 70, as though fully set forth herein. 

72. By virtue of the foregoing, Defendants, singly or in concert with others, in 

connection with the purchase or sale of securities, by the use of the means or instrumentalities of 

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interstate commerce, or of the mails, or a facility of a national securities exchange, directly or 

indirectly: (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of 

material fact or omitted to state material facts necessary in order to make the statements made, in 

the light of the circumstances under which they were made, not misleading; or (c) engaged in 

acts, practices, or courses of business which operated or would have operated as a fraud or deceit 

upon persons. By virtue of the foregoing, Defendants, directly or indirectly, violated, and unless 

enjoined, will again violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5].  

SECOND CLAIM FOR RELIEF 
Violations of Securities Act Sections 17(a) 

(Against both Defendants) 
 

73. The SEC realleges and incorporates by reference each and every allegation in 

paragraphs 1 through 70, as though fully set forth herein. 

74. By virtue of the foregoing, Defendants, singly or in concert with others, in 

connection with the offer or sale of securities, by the use of the means or instrumentalities of 

interstate commerce, or of the mails, or a facility of a national securities exchange, directly or 

indirectly: (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of 

material fact or omitted to state material facts necessary in order to make the statements made, in 

the light of the circumstances under which they were made, not misleading; or (c) engaged in 

acts, practices, or courses of business which operated or would have operated as a fraud or deceit 

upon persons. By virtue of the foregoing, Defendants, directly or indirectly, violated, and unless 

enjoined, will again violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a))].  

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THIRD CLAIM FOR RELIEF 
Violations of Investment Company Act Section 17(j) and Rule 17j-1(b)(1) and (3) 

(Against Billimek) 
 

75. The SEC realleges and incorporates by reference each and every allegation in 

paragraphs 1 through 70, as though fully set forth herein. 

76. By engaging in the conduct described above, Billimek, an affiliated person of an 

investment adviser, that is, the Asset Manager, of certain registered investment companies, in 

connection with the purchase or sale, directly and indirectly, of a security held or to be acquired 

by registered investment companies advised by those registered investment companies, has: 

(a) employed devices, schemes and artifices to defraud those registered investment companies; 

and (b) engaged in acts, practices or courses of business that operates or would operate as a fraud 

and deceit on those registered investment companies.  

77. By reason of the foregoing acts and practices, Billimek violated and, unless 

enjoined, will continue to violate Section 17(j) of the Investment Company Act [15 U.S.C. § 

80a-17] and Rule 17j-1(b)(1) and (3) [17 C.F.R. § 270.17j-1(b)(1) and (3)] thereunder.  

PRAYER FOR RELIEF 

WHEREFORE, the SEC requests that the Court: 

I. 

Find the Defendants violated the securities laws and rules promulgated thereunder as 

alleged against them; 

II. 

Enter an injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil 

Procedure, permanently restraining and enjoining Defendants from violating the laws and rules 

they are alleged to have violated; 

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III. 

Order Defendants and Relief Defendants to disgorge all of the ill-gotten gains from the 

violations alleged in this Complaint, and order them to pay prejudgment interest thereon; 

IV. 

Order Defendants to pay civil money penalties pursuant to Exchange Act Section 21A 

[15 U.S.C § 78u-1], or Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Securities 

Act Section 20(d) [15 U.S.C. § 77t(d)], and Investment Company Act Section 49 [15 U.S.C. § 

80a-48] and; 

V. 

Retain jurisdiction over this action to implement and carry out the terms of all orders and 

decrees that may be entered; and 

V. 

Grant any other and further relief as the Court deems just and proper. 

DEMAND FOR A JURY TRIAL 

The SEC demands a trial by jury on all claims so triable. 

 

Dated: December 14, 2022 
 

Respectfully submitted, 
 

_________________________________________ 
Gregory A. Kasper (NY 2735405; SDNY GK6596) 
Terry R. Miller (pro hac vice application forthcoming) 
SECURITIES AND EXCHANGE COMMISSION 
Denver Regional Office 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 
[email protected]  
[email protected] 

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KasperG


	2022.12.13 D-04040 Draft Complaint (final) (signed no number).pdf
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