Justin Chen, a Brooklyn resident who once handled corporate paperwork for a living, is now headed to federal prison for using that access to make more than $2.2 million in illegal trades.
On Tuesday, U.S. District Judge Orelia Merchant sentenced Chen to 27 months behind bars after he admitted tapping nonpublic company filings to trade ahead of market-moving announcements. Prosecutors said the scheme let him quietly cash in before the rest of Wall Street even saw the news.
In court, Judge Merchant told Chen that “his crimes wither away the public's trust in the markets, which cannot be condoned,” according to Bloomberg. The sentencing took place in federal court in Brooklyn.
How prosecutors say the scheme worked
According to federal filings, Chen worked at EdgarAgents LLC, a private vendor that helps companies prepare and submit documents to the Securities and Exchange Commission’s EDGAR system. Authorities say Chen and a co-defendant regularly tapped into a shared inbound account that collected pending filings before they hit the public database.
As laid out in an SEC complaint, the two allegedly traded on material nonpublic information at least 13 times, generating more than $2.2 million in profits the government describes as ill-gotten.
Arrest and guilty plea
The SEC document says Chen and his co-defendant were arrested in late June 2025 as they tried to board flights out of the country. The complaint states that “they together obtained ill-gotten profits of more than $2.2 million.”
Chen later pleaded guilty to a conspiracy charge in October 2025 in federal court, according to reporting by Bloomberg Law.
Judge's remarks and sentence
Judge Merchant said the 27-month sentence needed to reflect both Chen’s conduct and the broader message it sends about fairness in the markets. Her criticism, along with the length of the prison term, was detailed in coverage by Bloomberg.
Enforcement climate
The case lands in the middle of a broader push by federal prosecutors and regulators to crack down on schemes that mine private regulatory or underwriting data for fast profits. The U.S. Attorney’s Office for the Eastern District of New York has brought other insider-trading prosecutions this year, signaling an ongoing focus on market-data abuses, according to a recent DOJ release.
Chen will serve his 27-month sentence and may also face civil penalties from the SEC, which still has a civil case pending against him and a co-defendant. For firms that outsource parts of their EDGAR workflow to third-party vendors, the episode is a blunt reminder of how much compliance risk can lurk behind the login screen.
