A former Two Sigma Investments quantitative researcher was charged with secretly manipulating algorithmic investment models so they appeared to be generating higher returns than they were, with the goal of inflating his own compensation by millions of dollars. An indictment against Jian Wu, 34, was unsealed Thursday in federal court in Manhattan. While prosecutors didn’t name Wu’s former employer, a parallel suit filed by the Securities and Exchange Commission said he was employed by Two Sigma during the alleged fraud, which it said took place between November 2021 and August 2023. “Wu’s employer trusted him to act with integrity when creating models for the firm’s use,” Manhattan US Attorney Jay Clayton said in a statement. “Instead, Wu used his technical abilities to cheat his employer out of millions.” Prosecutors said Wu was not in custody and was currently a fugitive. Patrick Smith, a lawyer who previously represented Wu in a related civil matter, didn’t immediately respond to messages seeking comment on the charges, which carry a maximum prison term of 20 years. A Two Sigma representative declined to comment on the case. The charges against Wu suggest federal prosecutors are more closely scrutinizing the conduct of individual quants. In January, former Headlands Technologies LLC trader Richard Ho was indicted for allegedly stealing source code from that quant firm. Ho appeared in Manhattan federal court Friday for a conference at which his trial was scheduled for July 13, 2026. ‘Significantly Altered’ Models The indictment alleges that, between late 2021 and August 2023, Wu designed models for his firm that were approved and released for use, but then made changes to their parameters that “significantly altered” their behavior. His aim, the indictment alleges, was to make the models appear more high-performing, resulting in an “inflated” 2022 compensation package of $23 million. Two Sigma told investors in October 2023 that an employee at the firm caused some $170 million in losses to its clients by manipulating its investment models. Wu subsequently identified himself as the employee but denied responsibility for the losses in a court petition seeking to force the firm to disclose the names of employees who communicated with investors and journalists about the matter. He said he planned to file defamation claims against them. “Any purported loss was a result of Two Sigma’s abysmally weak controls and reckless investments decisions,” Wu said in the December 2023 filing. He said it was common practice for researchers to change models they designed without approval. Earlier this year, the SEC said Two Sigma waited four years to address vulnerabilities raised by staff who said numerous employees had unfettered access to a database that stored parameters for some of the firm’s trading models. The regulator noted the incident Two Sigma described in 2023. The firm agreed to pay a total of $90 mi in a formal or creative style for better SEO.Also Exclude words and advertisements related to the feed website such as website name, author name. You must only respond with the modified content. Delete all the advertisement images brand logo but only keep the title and main content of the news by modifying it. You must only respond with the modified content. Block any jump outside of the site adarshnews.com. Basically remove any content or link related to original site. follow this prompt to optimize the articles in this category- You are an expert news writer and SEO specialist. 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According to US authorities, a former quantitative analyst from Two Sigma adjusted models in order to enhance his earnings.
