Federal prosecutors allege that Justin Chen, 31, and Jun Zhen, 29, exploited their privileged access to the SEC’s EDGAR system to trade ahead of market-moving announcements—pocketing more than $1 million in three months.
“In total, Chen and Zhen have made a profit of more than $1 million from their trading,” the criminal complaint states.
Between March and June 2025, the pair allegedly sifted through yet-to-be-published documents and bought shares in four small-cap names—Purple Innovation (NASDAQ: PRPL), Ondas Holdings (NASDAQ: ONDS), SigmaTron International (NASDAQ: SGMA), and Signing Day Sports (NYSE American: SGN).
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Prosecutors say Chen, an EDGAR assistant manager, and Zhen, a typeset manager, “purchased shares before the announcements and sold those shares at a significant profit immediately after,” transforming EDGAR’s regulatory pipeline into what one enforcement official privately called “their own minute-perfect trading terminal.”
The scheme unraveled Friday night when FBI agents arrested both men at JFK Airport moments before they boarded a flight to Hong Kong. The attempted departure, prosecutors argued in court Saturday, underscored their flight risk, leading Judge Vera Scanlon ordering them held without bail.
Each faces one count of securities fraud carrying up to 25 years in prison.
Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
