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by Mike Caswell

Toronto's Sean Wygovsky has pleaded guilty to criminal charges he faces in New Jersey for a nine-month-long insider trading scheme involving several new listings. Prosecutors claim that he tipped a friend about upcoming mergers with SPACs (or special purpose acquisition companies). His friend traded on the information and realized $3.4-million in profits, at least some of which he used to take Mr. Wygovsky and his family on expensive vacations, the government says.

Mr. Wygovsky entered the guilty plea in an appearance before a judge in New Jersey on Thursday, May 25. The charge to which he has pleaded guilty is one count of securities fraud. After accepting the plea, the judge released Mr. Wygovsky on a $500,000 appearance bond and with travel restrictions that include the surrender of his passport.

The charge to which Mr. Wygovsky pleaded guilty carries a maximum sentence of 20 years, but he will not serve a prison term anywhere near that length. As part of his plea agreement, the government will make a sentencing recommendation that amounts to about four years in jail. Mr. Wygovsky will receive some credit for co-operating with prosecutors. The final determination will, of course, be up to the judge.

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