Former Expedia IT Support Worker Sentenced for Insider Trading
Used Computer Network Credentials to Access Company Emails to Obtain Non-Public Information
A computer support technician formerly employed at Expedia offices in San Francisco was sentenced today in U.S. District Court in Seattle to 15 months in prison for securities fraud, announced U.S. Attorney Annette L. Hayes. JONATHAN LY, 28, of San Francisco, pleaded guilty in December 2016, admitting he used his position in tech support at Expedia to access emails of Expedia executives so that he could trade in Expedia stock and illegally profit from non-public information. At sentencing U.S. District Judge John C. Coughenour imposed three years supervised release.
“This was not a one-time lapse in judgement – this defendant used his technology skills to repeatedly invade the email accounts of Expedia executives so that he could enrich himself at the expense of others,” said U.S. Attorney Annette L. Hayes. “Even after he moved on to a better paying position at a different technology firm he continued his crimes, all while trying to make it look like other employees were at fault. I commend Expedia for quickly contacting law enforcement and working with investigators to stop the computer intrusions and identify those responsible.”
According to records filed in the case, between 2013 and 2015, LY was employed by Bellevue based Expedia as a Senior IT Technician in the San Francisco office of subsidiary Hotwire.com. In order to provide IT support, LY had network privileges that allowed him to remotely access the electronic devices of Expedia executives. Using those privileges LY accessed documents and emails containing non- public information on the devices of both the Chief Financial Officer and the Head of Investor Relations. Using the non-public information, LY executed a series of well-timed trades in Expedia stock options.
Even after he left the company in 2015, LY kept an Expedia laptop, and without the knowledge of the company, continued to access the electronic devices and email accounts of Expedia executives. LY used his know-how to make it appear as though other Expedia employees were actually the ones accessing the devices. Shortly after discovering the computer intrusions, Expedia reported the misconduct to the FBI and undertook its own forensic investigation. Because of the quick reporting, the FBI was able to trace the computer intrusion to LY. As part of his plea agreement LY will repay Expedia the $81,592 it spent investigating the computer intrusion.
LY faces a separate Securities and Exchange Commission action requiring him to pay back the more than $331,000 in illegal profits he made in the scheme.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Katheryn Kim Frierson.