A former quantitative researcher at Headlands Technologies faces federal criminal charges for allegedly stealing proprietary source code that cost the firm over $1 billion to develop.
Cheuk Fung Richard Ho was indicted in the Southern District of New York on charges of theft and attempted theft of trade secrets. He has pleaded not guilty and is seeking dismissal.
According to the indictment, Ho misappropriated key components of Headlands’ trading infrastructure, known internally as “Atoms” and “Alphas,” between July 2019 and August 2021 while still employed at the Chicago-based quantitative trading firm.
Ho resigned in July 2021. That same year, he launched a competing firm called One R Squared, allegedly using the stolen code for competitive advantage.
Headlands first filed a civil lawsuit in June 2023. The criminal indictment was unsealed on January 8, 2025, leading to Ho’s arrest in Los Angeles. The charges carry a maximum penalty of ten years in prison.
Criminal prosecution over trade secrets in quantitative finance is rare. Civil lawsuits between firms and departing employees are common. Ho’s defense emphasizes complexities around employee mobility and intellectual property. But the prosecution alleges Ho copied specific source code, not just remembered strategies.
For investors, the case highlights a fundamental risk: the value of a quant fund is embedded in its intellectual property. Headlands’ $1 billion-plus investment underscores the stakes when a researcher goes rogue.