The Southern District of New York Federal Prosecutor’s Office in Manhattan announced on the 8th that former quantitative trader Cheuk Fung Richard Ho was arrested in Los Angeles, California, for allegedly stealing trade secrets from a leading global quantitative trading company referred to as “Firm-1.” Ho has been indicted by the Southern District of New York prosecutor and could face up to 10 years in prison if convicted.
According to the indictment, Ho is accused of illegally stealing crucial trade secrets, including the core source code and predictive formulas relied upon by the company, during the period from July 2019 to August 2021, utilizing his access rights as an employee of Firm-1. The development cost of these secrets exceeded one billion dollars and was key to Firm-1’s success in the competitive field of quantitative trading.
Prosecutors allege that Ho flagrantly violated the confidentiality agreement he signed by planning to use these secrets to develop his own trading strategies and establish a new company, known as “Firm-2.” What’s even more concerning is that while still employed by Firm-1, Ho reportedly collaborated with a rival company named “Firm-3” in an attempt to expand his sphere of influence.
The indictment states that Ho, abusing his position, stole Firm-1’s trade secrets to expedite the growth of Firm-2. When Firm-1 became aware of this, he tried to conceal his actions by instructing employees to delete internal communications and the developmental history of related source code. However, not all employees fully complied with these instructions, leading to the exposure of the incident.
In a statement, Acting Southern District Prosecutor Edward Y. Kim condemned Ho’s actions as a betrayal of trust, designed to seek personal and business advantages improperly. FBI Assistant Director James E. Dennehy also denounced such abuses of power, reaffirming the FBI’s commitment to combatting commercial fraud and unfair competition practices.