David R. Chase, P.A.
Call Us Now: 800-760-0912
David R. Chase, P.A.
Call Us Now: 800-760-0912


SEC Busts Hacker Who Stole Company Inside Information and Handsomely Profited On It

The Securities and Exchange Commission announced yesterday that it brought insider trading charges against a San Francisco-based IT specialist who is alleged to have hacked senior executives at Expedia and illegally traded on the stolen non-public, material information.

The SEC claims that Jonathan Ly, who worked in Expedia’s corporate IT services department, illegally traded in advance of nine company announcements from 2013 to 2016 and made almost $350,000 in profits. According to the SEC’s allegations, Ly utilized administrative access privileges for IT personnel to remotely hack into computers and email accounts of senior executives and view confidential information, including pre-earnings reports. Ly targeted Expedia’s yet-to-be-announced earnings and internal data describing how the market would likely react to such announcements.

The U.S. Attorney’s Office for the Western District of Washington announced criminal charges against Ly in a parallel action, which he has agreed to resolve.

Prosecutors said Expedia discovered the breach and reported it to the FBI, which was able to trace the intrusion to Ly.

To settle the charges in the SEC’s complaint, filed in federal court in Seattle, Ly agreed to pay disgorgement of $348,515.72 plus interest of $27,391.30 for a total of $375,907.02.

Notably absent from the SEC settlement is a civil penalty, which is standard in a SEC insider trading settlement, and which is typically the same amount as disgorgement. The SEC likely agreed to forego a civil penalty given that Mr. Ly is resolving the criminal charges against him, which could include jail time, thus rendering the purpose of a civil penalty moot.

David R. Chase, a SEC defense lawyer, is the principal of the Law Firm of David R. Chase, a Fort Lauderdale based securities regulatory defense law firm that represents individual in SEC and FINRA investigations and enforcement actions throughout the nation.

You may contact Mr. Chase for a confidential consultation toll-free at: 800-760-0912, or send him an e-mail: david@davidchaselaw.com. The firm’s website is: www.securitiesfrauddefense.net.

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