Friends Accused of Trading on Data for Edgar Face Widening Probe
(Bloomberg) – The agents had to move fast when they found out that two men focusing on the trade investigation of the learners were about to fly to Hong Kong.
On the morning of June 28th, Federal agents arrested 31 -year -old Justin Chen and 29 June Zhen. The prosecutors say that they have given at least $ 1 million by taking the information they have learned from their jobs in a private company that forms the materials before being submitted to the Edgar filing system of the securities and the stock market commission.
At a pair of court hearing, prosecutors said that two men are aware of at least four companies allegedly made trades based on non -public information. However, when Chen and Zhen were arrested, the authorities were investigating whether they were doing more trade in at least six companies before they entered the Cathay Pacific flight.
“We probably didn’t arrest the defendants because the investigation continued at this point,” US Deputy Lawyer Nicholas Axelrod said. “If he’s not for travel.”
The arrests have been continuing problems about how to obtain the SEC’s online portal for more than 30 years before being announced to the public in the Edgar database Edgar database. In 2021, the SEC brought the cases of practice against a few people they accused of hacking to third -party companies engaged in Edgar System.
He became Deputy Director of Chen Edgar and the string director at Edgaragents.com based in Zhen New York. Companies such as Edgaragents help to prepare the company’s files before being sent to the EDGAR system and distributed to the public.
Between March and June 2025, prosecutors say that they obtained information that was not publicly before the statements, such as merger, which “each company’s stock resulted in significant increases in the stock price”.
“This was an incredibly brazen plan,” he said to a federal peace judgment in Brooklyn in New York on Monday. “They traded on information and traded in an aggressive way.”
For both men, lawyers refused to comment on the charges. At this point, no man has made a defense in the proceedings.
According to the LinkedIn profile, Chen said that prosecutors earned $ 100,000 a year and said that he has been working in the company since 2020 and that he has been working in companies that manage Edgar data since 2012. His sister also worked at the company.
Prosecutors say that two men have reached at least four companies proposed before the information is announced to the public; Ondas Holdings Inc., Purple Innovation Inc., Signing Day Sports Inc. and Sigmatron International Inc.
In an example, prosecutors, Chen and Zhen, the company’s artificial intelligence service is a provider Palantir with a strategic partners of a strategic partnership that explains a SEC 8-K form just before publishing tens of thousands of Ondas Holdings, he says. They earned about $ 36,749 in the 24 -hour period before and after the announcement.
Stephen Bonventre, Chairman of the Executive Board of Edgaragents, said that the company cooperated with the US investigation and that both men are no longer with the company.
“The alleged activities are completely contrary to our company values and the integrity we have established,” he said.
SEC refused to comment on the case, but Axelrod said the agency’s prosecutors said they had identified suspicious trade in other companies that are currently part of the government’s ongoing criminal investigation.
Following their arrests, two courts depicted Axelrod, Chen and Zhen as two men on the verge of escaping from the country where the trial was progressing.
He pointed to a text that Chen sent to Zhen: “We have to go out quickly.”
However, during the hearing on Monday, the magistrate’s judge Judge Peggy Kuo suspected that Axelrod’s Chen’s “Fast Out Go” message would mean that two men would escape.
Kuo said Chen might mean that instead of leaving the United States, he should “get out of the trade position.
Im I read this as it was in the context of a flight, Ax Axelrod said. “The government’s concern that the defendant can escape.”
Another text from Chen to Zhen as the evidence they plan to escape.
According to Axelrod, he said, “Give me 2 months to buy as much as possible,” he said.
Chen’s lawyer Charles Milloen tried to release his client, arguing that he could still not leave the United States since his passport.
At the first hearing last week, Zhen’s lawyer Chris Wright said that his client was not at risk of flight.
“There is every reason to stay in the United States, Wr Wright said. “His family is here. He’s not a Chinese citizen, but an American citizen.”
Chen’s mother cried on Monday while sitting while listening to the government’s allegations. Chen’s sister, who was looking for a bail hearing, and agreed to send $ 10,000 in cash to win its release.
Kuo said that Chen’s mother and sister can be released with a $ 1 million bond guaranteed.
“I hope, enough to keep Mr. Chen in the area, Ku Kuo said.
Chen was released on Tuesday. According to the Federal Prison Registration Office, Zhen, which is determined as $ 500,000, is detained on Saturday morning.
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