Justin Chen, the former assistant manager at EdgarAgents LLC who read client filings before they reached the market and traded on them, has been sentenced. On July 7, 2026, United States District Judge Orelia E. Merchant sentenced him to 27 months in prison in federal court in Brooklyn, and ordered him to forfeit $1,828,442 in ill-gotten gains and pay $115,437.19 in restitution. On September 8, 2026, the U.S. District Court for the Eastern District of New York entered a final consent judgment resolving the Securities and Exchange Commission’s parallel civil case. His co-defendant Jun Zhen was scheduled for sentencing on September 9, 2026.
The conclusion arrives a little over a year after FBI agents arrested both men at John F. Kennedy International Airport as they prepared to board a flight to Hong Kong. We covered the arrest and the original charges in August 2025.
What the Final Judgment Does
The September judgment reimposes injunctive relief that had already been entered in a partial consent judgment on March 16, 2026, permanently enjoining Chen from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3. It orders him liable for disgorgement of $1,828,442 and prejudgment interest of $32,361.
Payment of that sum is deemed satisfied by the restitution and forfeiture orders entered against him in the criminal case, United States v. Chen, 25-cr-303. That is the standard arrangement where civil and criminal proceedings address the same conduct. It prevents the same money being recovered twice, and it means the practical financial consequence runs through the criminal court rather than the SEC.
Guilty Pleas and the Route to Sentencing
Both men pleaded guilty to one count of conspiracy to commit insider trading. Zhen entered his plea on October 21, 2025. Chen followed on October 29, 2025. Sentencing was initially listed for March 2026 and moved, with Chen ultimately sentenced in July.
The securities fraud charge as originally brought carried a maximum of 25 years. The 27 months imposed reflects the conspiracy count to which Chen pleaded, and the guidelines calculation that followed from the amount involved and his acceptance of responsibility. The forfeiture figure of $1,828,442 represents the gains attributed to him individually, against combined profits across both defendants that the SEC put at more than $2.38 million.
The Access That Made It Possible
Chen worked as an operator and assistant manager at a firm that formats and transmits regulatory filings for public companies, processing more than 40,000 of them a year. Clients sent proposed filings to a shared email inbox, where assistant managers reviewed them before submission to EDGAR. Draft filings routinely contain material nonpublic information, and company policy expressly prohibited employees from trading on it.
Between March 11 and May 28, 2025, EdgarAgents filed Form 8-Ks for four companies, each carrying a positive announcement. The day before each filing, Chen and Zhen bought thousands of shares. Shortly after each went public, they sold. The companies named in the criminal complaint included Purple Innovation, Ondas Holdings, SigmaTron International and Signing Day Sports. The SEC identified at least 13 occasions in total.
EdgarAgents was not accused of any wrongdoing. The duty the government said Chen breached ran to his employer and to the clients who had entrusted documents to it.
How the Pattern Surfaced
The investigation began in the SEC’s Market Abuse Unit, which analysed the trading using Consolidated Audit Trail data. The CAT records order and trade activity across United States equity and options markets, giving regulators a consolidated view built after the 2010 flash crash.
That consolidated view is what made the case. Neither Purple Innovation nor Ondas nor SigmaTron nor Signing Day Sports could have seen two filing-agent employees accumulating positions the day before their announcements, because from inside any one company the trades look like ordinary volume. Across all markets at once, two accounts repeating the same manoeuvre on unrelated issuers, minutes apart, is not ambiguous. The final judgment closes the civil matter against Chen.
Conclusion
Justin Chen was paid to handle documents that would move share prices the moment they were published, and he bought the shares first. He did it repeatedly over three months, coordinating with a colleague who was doing the same thing minutes apart. When the FBI arrested them at JFK they had tickets to Hong Kong. He pleaded guilty in October 2025, was sentenced to 27 months in July 2026, and must forfeit $1,828,442. The SEC closed its case on September 8. His co-defendant was due in court the following day. The clients who sent those filings to a shared inbox had no way of knowing who was reading them.
