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Brooklyn insider trading bust: duo charged in $1M SEC filing scheme

2025-06-30 10:45:36

Brooklyn insider trading bust: duo charged in $1M SEC filing scheme

Main Idea

Two individuals, Justin Chen and Zhen, were charged for allegedly making $1M in illegal profits by trading stocks ahead of merger announcements using non-public information obtained through their work at EdgarAgents.com, a third-party SEC filing contractor.

Key Points

1. Chen and Zhen worked at EdgarAgents.com, a company that assists businesses with SEC filings, and allegedly traded stocks like Purple Innovation and Ondas Holdings using material, non-public information.

2. The duo made approximately $1,000,000 in profits by timing their trades just before merger announcements became public.

3. FBI intercepted Chen and Zhen at JFK Airport before they could board a flight to Hong Kong, and they were ordered to remain in custody without bail.

4. In a related case, Terren Peizer, former CEO of a health analytics firm, pleaded guilty to insider trading, involving $20M in stock sales before negative news, and was fined $5.25M and ordered to forfeit $12.7M in profits.

5. The Department of Justice and FBI are continuing investigations into insider trading, highlighting a broader crackdown on such activities.

Description

A new insider trading case has emerged in Brooklyn, exposing a scheme that exploited confidential company data before it became public. Two men, Justin Chen, 31, and Jun Zhen, 29, have been arrested and charged with securities fraud after allegedly using non-public information from corporate filings to earn over $1,000,000 in illegal profits. The trades reportedly involved stocks such as Purple Innovation, Ondas Holdings, SigmaTron, and Signing Day Sports, and were timed just ahead of major merg...

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