A Brooklyn man is headed to prison for his role in a $2.3 million insider trading scheme.
Justin Chen, also known as Jia Wei Chen, on Tuesday was sentenced 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, according to Joseph Nocella, Jr., United States Attorney for the Eastern District of New York.
Chen was ordered to forfeit $1,828,442.00 in ill-gotten gains and pay $115,437.19 in restitution. A co-defendant, Jun Zhen, of Brooklyn, pleaded guilty in October 2025 for his role in the insider trading conspiracy and is awaiting sentencing.
As a part of his employment, Chen and his co-defendant Zhen, were responsible for reviewing draft securities filings and providing those filings to a employees at another company that 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, prosecutors said.
For instance, in the afternoon and evening on May 20, 2025, Chen and Zhen purchased approximately 186,275 shares of SigmaTron International, Inc. (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, according to prosecutors.
Chen engaged in similar trading, sometimes within minutes of material announcements, in Ondas Holdings, Inc. (ONDS); Purple Innovation, Inc. (PRPL); Signing Day Sports, Inc. (SGN); Triller Group, Inc. (ILLR); ARB OIT Group Limited (ARBB); Asset Entities Inc. (ASST); Rumble Inc. (RUM); Gryphon Digital Mining Inc. (GRYP); New GenIVF Group Limited (NIVF); Getty Images Holding (GETY); and Polyrizon Ltd. (PLRZ).
“Chen abused his position with his employer and misappropriated material non-public information to make millions,” Nocella said in a statement. “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.”
