Two Sigma is set to pay up to $100 million in a settlement with the United States Securities and Exchange Commission (SEC), according to a report by Wall Street Journal on Thursday.
The SEC investigated the New York hedge fund because a senior researcher allegedly adjusted Two Sigma's investing models without authorization. According to the report, the researcher, Jian Wu, tried to boost his compensation and made changes that helped some Two Sigma funds gain a total of $450 million. This, in turn, led to unexpected losses for other funds that amounted to $170 million. Wu was subsequently let go from the firm.
The company's co-founders, John Overdeck and David Siegel, stepped down from their positions of co-chief executive officers in August but remained co-chairmen. Scott Hoffman and Carter Lyons replaced them as Two Sigma's new co-CEOs.
