Two Sigma Waited Four Years to Fix Known Flaw, SEC Alleges (3)

Two Sigma Investments waited four years to address vulnerabilities that hedge fund employees noticed in its investment models and violated a rule protecting whistleblowers, the US Securities and Exchange Commission alleged.

The firm’s Two Sigma Investments and Two Sigma Advisers agreed to pay a total of $90 million in civil penalties to settle the SEC claims and voluntarily repaid $165 million to affected funds and accounts, the regular said Thursday in a cease-and-desist order.

Two Sigma, which manages more than $60 billion, didn’t admit to or deny the allegations.

In 2023, Bloomberg reported that a Two Sigma researcher allegedly ...