SEC v. Justin Chen; and Jun Zhen, No. LR-26380, Eastern District of New York (Aug. 18, 2025) — Press Release
raw: Justin Chen; Jun Zhen
Justin Chen; Jun Zhen, No. LR-26380 (E.D.N.Y. Aug. 18, 2025)
summary
Justin Chen and Jun Zhen face SEC charges for an insider trading scheme that generated over $2 million in profits using their employer's client data.
paragraph
Justin Chen and Jun Zhen are charged with violating antifraud provisions of the Securities Exchange Act of 1934 for leveraging material nonpublic information. The scheme involved at least 13 trades between January and June 2025, resulting in over $2 million in ill-gotten profits. The SEC is seeking disgorgement, prejudgment interest, civil penalties, and permanent injunctions.
narrative
The SEC filed charges against Justin Chen and Jun Zhen, two former employees of a public filing assistance company, for orchestrating an insider trading scheme. Between January and June 2025, the duo allegedly used material nonpublic information regarding client mergers and earnings to execute at least 13 trades. This activity generated over $2 million in illicit profits and violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934. The investigation was spearheaded by the SEC's Market Abuse Unit using Consolidated Audit Trail (CAT) data. In addition to the civil suit, the defendants face parallel criminal charges from the U.S. Attorney's Office for the Eastern District of New York. The SEC is now seeking disgorgement, interest, civil penalties, and an injunction against future violations.
Classified insider-trading(confidence 100%). EDGAR detection: forms 4/3/5/144· recall 81% / precision 19%. detection rule →
Statutes
Sections 10(b) and 14(e) of the Securities Exchange ActSections 10(b) and 14(e) of the Securities Exchange Act
Parties
Securities and Exchange CommissionJustin ChenJun Zhen
Keywords
chenchen zhenzhensecurities exchangejustin chenexchange commissioninsider tradingmaterial nonpublicnonpublic informationmarket abuseabuse unitsec'ssecuritiesexchangesec
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 2
- $2.00M $2 Million $1M–$10M
- $2.00M $2 million $1M–$10M
Entities 9
- person david bennett
- person final judgment
- scheme_term insider trading charges
- person Jun Zhen
- person Justin Chen
- person parallel criminal action
- agency sec's investigation
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
Triples 11
- Securities And Exchange Commission filed insider trading charges
- Justin Chen traded stocks of employer’s clients
- Jun Zhen traded stocks of employer’s clients
- Chen And Zhen generated $2 million in ill-gotten profits
- Securities And Exchange Commission seeks final judgment
- U.S. Attorney's Office brought parallel criminal action
- Securities And Exchange Commission investigated Chen and Zhen's suspicious trading activity
- David Bennett conducted SEC's investigation
- Securities And Exchange Commission appreciates U.S. Attorney's Office assistance
- Securities And Exchange Commission charges Chen and Zhen with violating antifraud provisions
- FBI assisted Securities And Exchange Commission
PDF (from attached: complaint)
Text layers
Extracted body text (2,380c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26380 / Aug. 21, 2025 Securities and Exchange Commission v. Chen et al., No. 25-cv-4580 (E.D.N.Y. filed Aug. 18, 2025) SEC Charges Two Brooklyn Men with $2 Million Insider Trading Scheme On August 18, 2025, the Securities and Exchange Commission filed insider trading charges against two former employees of a company that assists clients with public filings, for allegedly using material nonpublic information to trade the stocks of their employer’s clients. According to the SEC's complaint, Justin Chen and Jun Zhen were employed by a company that assisted its clients with making public filings in the SEC’s EDGAR system. Through that employment, Chen and Zhen allegedly obtained material nonpublic information about clients’ forthcoming announcement of events like mergers and earnings results. From around January to June 2025, despite their employer’s prohibition on engaging in insider trading, Chen and Zhen allegedly traded on the basis of material nonpublic information on at least 13 occasions and generated over $2 million in ill-gotten profits. The SEC's complaint, filed in the U.S. District Court for the Eastern District of New York, charges Chen and Zhen with violating the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The complaint seeks a final judgment ordering Chen and Zhen to pay disgorgement with prejudgment interest and civil penalties and enjoining them from committing future violations of the charged provisions. On June 28, 2025, Chen and Zhen were charged in a parallel criminal action brought by the U.S. Attorney's Office for the Eastern District of New York. The SEC's investigation originated from the Enforcement Division's Market Abuse Unit, which used Consolidated Audit Trail (CAT) data to analyze Chen and Zhen's suspicious trading activity. The SEC's investigation was conducted by David Bennett, John S. Rymas, and Lindsay S. Moilanen of the Enforcement Division's Market Abuse Unit and supervised by Market Abuse Unit Chief Joseph G. Sansone. The SEC's litigation is being led by Mr. Bennett and Ms. Moilanen and supervised by Daniel Loss of the SEC’s New York Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York and the FBI.
OCR text (2,380c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26380 / Aug. 21, 2025 Securities and Exchange Commission v. Chen et al., No. 25-cv-4580 (E.D.N.Y. filed Aug. 18, 2025) SEC Charges Two Brooklyn Men with $2 Million Insider Trading Scheme On August 18, 2025, the Securities and Exchange Commission filed insider trading charges against two former employees of a company that assists clients with public filings, for allegedly using material nonpublic information to trade the stocks of their employer’s clients. According to the SEC's complaint, Justin Chen and Jun Zhen were employed by a company that assisted its clients with making public filings in the SEC’s EDGAR system. Through that employment, Chen and Zhen allegedly obtained material nonpublic information about clients’ forthcoming announcement of events like mergers and earnings results. From around January to June 2025, despite their employer’s prohibition on engaging in insider trading, Chen and Zhen allegedly traded on the basis of material nonpublic information on at least 13 occasions and generated over $2 million in ill-gotten profits. The SEC's complaint, filed in the U.S. District Court for the Eastern District of New York, charges Chen and Zhen with violating the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The complaint seeks a final judgment ordering Chen and Zhen to pay disgorgement with prejudgment interest and civil penalties and enjoining them from committing future violations of the charged provisions. On June 28, 2025, Chen and Zhen were charged in a parallel criminal action brought by the U.S. Attorney's Office for the Eastern District of New York. The SEC's investigation originated from the Enforcement Division's Market Abuse Unit, which used Consolidated Audit Trail (CAT) data to analyze Chen and Zhen's suspicious trading activity. The SEC's investigation was conducted by David Bennett, John S. Rymas, and Lindsay S. Moilanen of the Enforcement Division's Market Abuse Unit and supervised by Market Abuse Unit Chief Joseph G. Sansone. The SEC's litigation is being led by Mr. Bennett and Ms. Moilanen and supervised by Daniel Loss of the SEC’s New York Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York and the FBI.