Unauthorized Trading Model Changes at Two Sigma Lead to $620M Financial Shift and Regulatory Scrutiny

By All Stocks News

A senior vice president at Two Sigma Investments, Jian Wu, modified the hedge fund’s trading models without permission, resulting in $620 million in unexpected financial shifts. These alterations led to both profit and loss across various funds, triggering regulatory attention from the Securities and Exchange Commission. Two Sigma had previously been under the SEC’s radar due to management issues and disputes among the firm’s founders. Two Sigma, a major quantitative-trading entity with $60 billion in assets, has since suspended Wu. The firm addressed the situation as “intentional misconduct” while others argue the changes were more about calibration, which is typically seen as routine. Wu, a Ph.D. from Cornell University, joined Two Sigma in 2018. Meanwhile, the company recently reduced its recruiting staff, signaling possible slowed growth.




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