In an ideal world, companies would be able to trust their employees one-hundred percent. However, there are those who take advantage of their position within an organization to perform illegal activities. Unfortunately, that was the case with Expedia’s Jonathan Ly. Earlier this month, the SEC charged Mr. Ly, an information technology specialist in Expedia’s corporate IT services department, with insider trading. From 2013 to 2016, Ly illegally traded Expedia securities, earning nearly $350,000 in profits. According to the SEC complaint, Ly used his IT personnel privileges to hack into the company computers and email accounts of senior executives, including the company’s Chief Financial Officer and the Head of Investor Relations. By this means, he accessed confidential documents, including pre-earnings reports and upcoming company agreements that had yet to be made public. He then used this information to trade Expedia securities prior to the announcements.“Ly allegedly exploited his role as an IT professional by stealing passwords and posing as other users in order to access Expedia’s confidential information,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.Additionally, when he left Expedia, he kept a company laptop without the company’s knowledge or permission. He used that to access Expedia’s network remotely. This enabled him to continue to steal confidential information for his insider trading activities.To settle the SEC complaint, Ly agreed to pay $375,907.02, which included $27,391.30 in interest. In addition to the SEC charges, he is also facing criminal charges from the U.S. Attorney’s Office for the Western District of Washington.Regardless of where a security threat comes from, whether internal or external, it is important to have cybersecurity measures in place. To learn how JLG can help you build a robust cybersecurity program, please call us at (619) 298-2880 or send an email to info@jackolg.com. Thank you.
