FRIEND'S SECRETS NET MAN NEARLY $900K IN INSIDER TRADING SCHEME!

SEC v. Charlie Jinan Chen — U.S. Securities and Exchange Commission Litigation Release No. 26247, dated February 13, 2025.

The SEC secured a final judgment against Charlie Jinan Chen for insider trading. Chen traded Vistaprint securities based on material non-public information from a family friend, making nearly $900,000. He was found liable by a jury and ordered to pay a civil penalty equal to his profits.

In Plain English

Imagine someone learns a company is about to announce good news before anyone else does. They then buy a lot of that company's stock, hoping the price will go up when the news comes out. That's what Charlie Chen did with Vistaprint stock, using secret information from a friend who worked there. He made almost $900,000 this way, and a court ordered him to pay that amount back as a penalty.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Receiving Inside Information Charlie Chen received material, non-public information about Vistaprint N.V.'s upcoming quarterly earnings announcements. This information was provided by a family friend who was an insider at Vistaprint or the spouse of an insider.
2. Trading on Options Based on this secret information, Chen purchased stock options ahead of five different earnings announcements. Options are contracts that allow the holder to buy or sell a stock at a specific price, and they can offer leveraged profits if the stock price moves significantly.
3. Profiting from Price Movement When Vistaprint's earnings were announced, the stock price moved as anticipated by the insider information. Chen's options became profitable due to this price movement, allowing him to cash in.
4. Trading in Multiple Accounts Chen executed these trades not only in a brokerage account under his own name but also in an account registered to his wife, Shui Foon Mok. This dual account strategy may have been an attempt to obscure the trading activity.
5. Generating Significant Profits Through this scheme, Chen realized nearly $900,000 in profits from his Vistaprint trades. The SEC's evidence at trial demonstrated that this profit was directly linked to the insider information he received.
6. Alleged Deception of Investigators The evidence presented also indicated that Chen lied to the FBI when questioned about his relationship with the Vistaprint insider. This suggests an effort to conceal his illegal activities and the source of his trading information.

The Enforcement Action

On January 30, 2025, the U.S. District Court for the District of Massachusetts entered a final judgment against Charlie Jinan Chen after a jury found him liable for illegal insider trading in advance of five Vistaprint N.V. earnings announcements. The jury found Chen violated antifraud provisions of the Securities Exchange Act of 1934 and the Securities Act of 1933. The final judgment permanently enjoins Chen from violating these provisions and orders him to pay a civil monetary penalty of $892,827.

Original SEC litigation release ↗ · Browse all cases