Former Expedia IT employee get 15 months in prison for insider trading

Reuters News
Posted: Apr 25, 2017 2:02 PM

(Reuters) - A former Expedia Inc computer support technician was sentenced to 15 months in prison on Tuesday after admitting he stole confidential information from senior executives' emails to profit from insider trading.

Jonathan Ly, 28, was sentenced by U.S. District Judge John Coughenour in Seattle after pleading guilty in December to a securities fraud charge for having engaged in an insider trading scheme that prosecutors said netted him $331,000.

As part of a plea deal, Ly had also agreed to repay Expedia the $81,592 it spent investigating the computer intrusion. He previously reached a $375,907 settlement with the U.S. Securities and Exchange Commission.

Prosecutors had sought a two-year prison sentence for Ly, a resident of San Francisco, according to court papers. A lawyer for Ly did not immediately respond to a request for comment.

According to court papers, in 2013, Ly began exploiting his administrative access privileges to secretly review the contents of devices belonging to executives including Expedia's chief financial officer and head of investor relations.

Prosecutors said that using the non-public information he obtained, Ly executed a series of well-times trades in Expedia stock options.

Even after he left the company in 2015, prosecutors said, Ly kept a company laptop and continued accessing the electronic devices and email accounts of Expedia executives.

Prosecutors said Expedia ultimately discovered the computer intrusion and reported it to the Federal Bureau of Investigation.

The case is U.S. v. Ly, U.S. District Court, Western District of Washington, No. 16-cr-00316.

(Reporting by Nate Raymond in Boston; Editing by Tom Brown)