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Chinese Ex-Employee of U.S. Hedge Fund Two Sigma Faces Fraud Charges

Published: Sep. 16, 2025 8:31 p.m. GMT+8

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Wu Jian and some of the model parameters he modified. Photo: AI generated

A former employee of U.S. hedge fund Two Sigma faces criminal charges for allegedly manipulating its algorithmic investment models.

Federal prosecutors in Manhattan and the Federal Bureau of Investigation (FBI) announced last week that Chinese national Wu Jian had been indicted for securities fraud, wire fraud and money laundering. Each charge carries a maximum sentence of 20 years behind bars.

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Wu Jian, a former Two Sigma employee, was indicted for securities fraud, wire fraud, and money laundering after allegedly manipulating at least 14 investment models between 2021 and 2023, causing at least $165 million in client harm.
Wu's actions resulted in inflated compensation of about $23 million for 2022; he was terminated in August 2023 and is believed to have returned to China.
The SEC also charged Wu and found Two Sigma's risk controls inadequate, with the firm managing over $60 billion in assets.

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Who’s Who

Two Sigma: Two Sigma is a New York-based quantitative hedge fund founded in 2001, managing over $60 billion in assets. It employs algorithm-driven models as its core investment strategy and has more than 1,500 employees worldwide. Former employee Wu Jian faces charges for manipulating its algorithmic investment models, causing $165 million in harm to clients.

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What Happened When

November 2021 - August 2023：: Wu Jian allegedly manipulated at least 14 investment models at Two Sigma.

2021 - 2023：: Wu Jian lied about the performance and uniqueness of his models during this period according to the indictment.

2022：: Wu Jian received inflated year-end compensation of approximately $23 million.

Early 2023：: Wu Jian anonymously posted on Xiaohongshu, boasting of a $23.5 million annual income, drawing attention to the case.

2023：: After Two Sigma uncovered Wu’s scheme, Wu made further unauthorized changes to his models in an attempt to hide past actions.

August 2023：: Wu Jian admitted to making changes to models without approval and was subsequently terminated by Two Sigma.

2023：: Wu Jian reportedly returned to China.

Late 2023：: Wu Jian filed a petition to a New York court seeking the identity of Two Sigma employees who allegedly defamed him.

Early 2025：: SEC investigation published, finding security vulnerabilities at Two Sigma from early 2019 through late 2023 and inadequate supervision between 2021 and 2023.

September 2025：: Federal prosecutors and the FBI announced Wu Jian's indictment; SEC launched a civil lawsuit against Wu Jian; Two Sigma disclosed financial impacts to clients and funds in correspondence to investors.

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