Employee of Securities Filing Agent Sentenced to 27 Months in Prison for Insider Trading

Earlier today, in federal court in Brooklyn, Justin Chen was sentenced by United States District Judge Orelia E. Merchant to 27 months in prison for insider trading conspiracy. Chen was previously employed at an EDGAR filing company and was responsible for reviewing draft securities filings before they were filed on the Securities and Exchange Commission's EDGAR filing system. Chen misused material non-public information taken from his employer to trade in the securities of 13 publicly traded companies, making at least $2.38 million in profits. In addition to the custodial sentence, Judge Merchant ordered Chen to forfeit $1,828,442.00 in ill-gotten gains and pay $115,437.19 in restitution. A co-defendant, Jun Zhen, pleaded guilty in October 2025 for his role in the insider trading conspiracy and is awaiting sentencing.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, and James C. Barnacle, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

"Chen abused his position with his employer and misappropriated material non-public information to make millions," stated United States Attorney Nocella. "This sentence sends the message to the public that we are watching and will aggressively prosecute those who exploit their access to private information for personal gain and undermine the integrity of economic markets."

Mr. Nocella thanked the Securities and Exchange Commission (SEC) for their significant assistance in the prosecution.

As detailed in court filings and on the record statements, Chen was employed as an assistant manager at a company identified as "EDGAR Filer 1." EDGAR Filer 1 is a filing agent that assists issuers of securities with submitting required disclosures to the SEC and the investing public through the SEC's EDGAR filing system. Through his employment at EDGAR Filer 1, Chen had advance access to upcoming SEC filings for EDGAR Filer 1's clients. These filings routinely included significant, market-moving information-material non-public information, including Form 8-K announcements about upcoming mergers and acquisitions, partnerships, asset sales, and quarterly earnings reports. As a part of his employment, Chen and his co-defendant Zhen, were responsible for reviewing draft securities filings and providing those filings to other EDGAR Filer 1 employees who would convert the filings to the format used by the SEC's EDGAR filing system. Chen and Zhen used their advanced knowledge of upcoming securities filings, which would disclose material non-public information about, for example, partnerships, mergers, and planned acquisitions, to trade in 13 NASDAQ-listed companies, making a total profit of at least $2.38 million.

For instance, in the afternoon and evening on May 20, 2025, Chen and Zhen purchased approximately 186,275 shares of SigmaTron International, Inc. (ticker: SGMA), an Illinois-based provider of electronic manufacturing services. The next morning, on May 21, 2025, SGMA announced that it had entered into a merger agreement whereby SGMA would be acquired by Transom Capital Group, LLC at a 134% price premium over SGMA's closing price per share on May 20, 2025. Following the announcement SGMA shares opened for trading on May 21, 2025 up approximately 127% from their closing price on May 20, 2025. Chen and Zhen sold all their shares in SGMA approximately a half-hour after the announcement, making a total profit of approximately $290,005.

Chen engaged in similar trading, sometimes within minutes of material announcements, in Ondas Holdings, Inc. (ticker: ONDS); Purple Innovation, Inc. (ticker: PRPL); Signing Day Sports, Inc. (ticker: SGN); Triller Group, Inc. (ticker: ILLR); ARB OIT Group Limited (ticker: ARBB); Asset Entities Inc. (ticker ASST); Rumble Inc. (ticker: RUM); Gryphon Digital Mining Inc. (ticker GRYP); New GenIVF Group Limited (ticker NIVF); Getty Images Holding (ticker: GETY); and Polyrizon Ltd. (ticker: PLRZ).

The government's case is being handled by the Office's Business and Securities Fraud Section. Assistant United States Attorneys Nick M. Axelrod and Sara K. Winik are in charge of the prosecution, with the assistance of Assistant United States Attorney Brendan King of the Office's Asset Recovery Section who is handling forfeiture matters.

The Defendant:

JUSTIN CHEN (also known as "Jia Wei Chen")
Age: 32
Brooklyn, New York

Co-Defendant Awaiting Sentencing:

JUN ZHEN
Age: 30
Brooklyn, New York

E.D.N.Y. Docket No. 25-CR-303 (OEM)