A trader who exploited inside information that he misappropriated from pending securities filings has been sentenced to 27 months in jail after pleading guilty to a charge of insider trading conspiracy.
According to court filings, Justin Chen — who worked as an assistant manager at a company that provided regulatory filings services for public companies, EdgarAgents LLC — used his position, which involved reviewing draft filings before they were entered into the U.S. Securities and Exchange Commission’s (SEC) filing system, to misappropriate market-moving information about pending transactions, quarterly earnings and other corporate activities.
Between January and June 2025, Chen, and his co-defendant — a co-worker at EdgarAgents, Jun Zhen — used that information to trade in the stocks of 13 publicly-traded companies, generating more than US$2 million in illicit trading profits.
Now, in a New York federal court, Chen has been sentenced to 27 months in prison, ordered to forfeit US$1.8 million in ill-gotten gains and to pay another US$115,437 in restitution.
Zhen, who also pled guilty for his role in the scheme, is awaiting sentencing.
The SEC also filed a parallel complaint in the U.S. district court for the Eastern District of New York, charging both men with securities law violations. In that case, the SEC is seeking disgorgement, civil penalties and conduct injunctions.