The FBI says the San Francisco man made nearly $331,000 on the illegal trades using stolen proprietary information. He could face up to 25 years in prison.
A former Expedia employee has pleaded guilty to securities fraud and faces up to 25 years in federal prison for stealing proprietary information from his bosses and using it to make more than $300,000 in illegal trades on the stock market, according to the U.S. Attorney’s Office.
Jonathan Ly, 28, of San Francisco, appeared Monday in U.S. District Court in Seattle, where he was charged and pleaded guilty to using his position as a senior computer-support technician at Expedia’s Bay Area offices to access the email of company executives in what U.S. Attorney Annette Hayes referred to as a “get-rich-quick scheme.” Expedia’s headquarters are in Bellevue.
FBI investigators say Ly made nearly $331,000 on the trades. The Securities and Exchange Commission has filed a separate civil action requiring him to pay back the money.
Ly is set to be sentenced before U.S. District Judge John Coughenour on Feb. 28.
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“The irony of our increasingly digital world is that the greatest threat to our networks is a human one,” said Hayes.
According to court documents, Ly worked as a senior IT technician in the San Francisco office of Expedia subsidiary Hotwire.com. Ly had computer-network privileges that allowed him to remotely access the electronic devices of Expedia executives.
Prosecutors allege that Ly used those privileges to access documents and emails containing nonpublic information that he later used to execute a series of what the government called “well-timed trades” of Expedia stock options, netting him hundreds of thousands in profits.
Ly left the company in 2015 but kept an Expedia laptop computer and continued to access private information, disguising his network footprint to make it appear that others were doing it, the U.S. Attorney’s Office said. Expedia eventually discovered the intrusions and contacted the FBI.
Ly’s attorney, John Runfola, said in a statement Monday that his client is “deeply sorry” for his actions and has accepted complete responsibility.
“He is looking forward to accepting any additional punishment the court feels is necessary at his sentencing … so he can move on with his life.”
Securities fraud is punishable by up to 25 years in prison and a $250,000 fine.