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SEC Announces Insider Trading Charges Against IT Specialist
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The U.S. Securities and Exchange Commission (SEC) recently announced insider trading charges against a San Francisco-based IT specialist who allegedly hacked senior executives at online travel company Expedia and illegally traded on company secrets.
The agency alleged that Jonathan Ly, who worked in the Expedia, Inc. (NASDAQ: EXPE) corporate IT services department, illegally traded in advance of nine company news announcements from 2013 to 2016 and generated nearly $350,000 in profits.
According to the complaint, Ly exploited administrative access privileges designated for IT personnel to remotely hack into computers and email accounts of senior executives and review confidential documents and pre-earnings reports. Ly particularly targeted information prepared by Expedia’s head of investor relations summarizing Expedia’s yet-to-be-announced earnings and describing how the market could react to particular announcements. Ly allegedly used this nonpublic information to make highly profitable trades in Expedia securities ahead of the announcements.
To settle the charges Ly has agreed to pay disgorgement of $348,515.72 plus interest of $27,391.30 for a total of $375,907.02. The settlement is subject to court approval.
Jina L. Choi, Director of the SEC’s San Francisco Regional Office, commented:
Ly allegedly exploited his role as an IT professional by stealing passwords and posing as other users in order to access Expedia’s confidential information. Ly’s alleged insider trading scheme continued even after he left Expedia when he secretly kept a company laptop and connected remotely to Expedia’s network to steal confidential information.
In a parallel action, the U.S. Attorney’s Office announced criminal charges against Ly.
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