Monmouth Co. Man Charged In Insider Trading Scheme, Feds Say

BRIELLE, NJ - A Brielle man and former partner at a Red Bank broker-dealer firm was charged Thursday with engaging in an insider trading scheme that netted him $3.4 million in illegal profits, federal officials said.

Christopher Matthaei, 44, of Brielle, was charged with one count of securities fraud conspiracy and one count of securities fraud, U.S. Attorney Philip R. Sellinger said in a statement. Matthaei appeared Thursday in Newark federal court and was released on $250,000 unsecured bond.

“Federal laws targeting insider trading are designed to protect the general public from those who attempt to cash in on private information,” FBI Newark Special Agent in Charge James E. Dennehy said. “We allege Matthaei used his knowledge to make more than $3 million, disregarding the rules and policies everyone is required to follow. His position doesn't give him, or anyone else, the power to break the law.”

Matthaei was a partner and senior salesperson at a Charlotte, North Carolina-based broker-dealer with offices in Red Bank, New Jersey, federal officials said.

Between May 2020 through February 2021, Matthaei illegally traded on non-public information that he received from a conspirator friend who worked at a large Canadian asset management firm, federal officials said.

“As alleged, Christopher Matthaei illegally exploited his relationship with a close friend to gain access to confidential information about yet-to-be-announced mergers and acquisitions involving special purpose acquisition companies, or SPACs,” Sellinger said. “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.”

Though the firm’s employees were prohibited from buying or selling the SPACs’ securities, the co-conspirator shared the confidential information with Matthaei, who then purchased securities in the SPACs using his personal brokerage accounts.

The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine; the securities fraud conspiracy count carries a maximum potential penalty 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 credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the arrest.