Prosecutors alleged they pocketed $1 million by stealing non-public information obtained through their jobs.
Two men who worked for the Securities and Exchange Commission’s EDGAR public filing system were charged with insider trading after allegedly pocketing $1 million by stealing non-public information obtained through their jobs.
Justin Chen and Jun Zhen, both of Brooklyn, New York, were charged in a federal complaint with obtaining material, non-public information about companies like Purple Innovation Inc., Ondas Holdings Inc., SigmaTron International Inc., and Signing Day Sports Inc. through their work at EDGAR, according to Brooklyn US Attorney Joseph Nocella.
Prosecutors say that between March and June 2025 the pair engaged in a scheme to obtain information about these companies, which announced they had entered into merger agreements or partnerships “that resulted in significant increases in the share price of each company’s stock.”
Chen, 31, and Zhen, 29, purchased shares in the companies before the announcements, “and sold those shares at a significant profit immediately after the announcement,” according to a complaint filed in federal court in Brooklyn. “In total, Chen and Zhen have made a profit of more than $1 million from their trading.”
Agents with the Federal Bureau of Investigation arrested Chen and Zhen Friday night at John F. Kennedy International Airport as they were planning to board a flight to Hong Kong, said John Marzulli, a spokesman for Nocella.
Chen worked as an EDGAR operator and assistant manager while Zhen worked as an EDGAR operator and typeset manager, prosecutors said. The two had access to the company announcements before they were filed.
Both men are charged with securities fraud, which carries a prison term of as long as 25 years, prosecutors said.
Chen and Zhen made their initial court appearances in federal court in Brooklyn on Saturday before US Magistrate Judge Vera Scanlon, who ordered them held without bail.
Chris Wright, a lawyer for Zhen, and Charles Millioen, a lawyer for Chen, didn’t immediately return email messages seeking comment about their clients.
This story was originally featured on Fortune.com
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