U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23826 / May 9, 2017
Securities and Exchange Commission v. Iat Hong, et al., No. 16-cv-9947 (S.D.N.Y. filed Dec. 27, 2016)
Default Judgments Entered Against All Defendants In Law Firm Hacking Case
The SEC today announced that it has obtained default judgments against Iat Hong, Bo Zheng, and Hung Chin, all of whom were charged with fraudulently trading on hacked nonpublic market-moving information stolen from two prominent New York-based law firms, racking up almost $3 million in illegal profits.The SEC also obtained a default judgment against Hong's mother, Sou Cheng Lai, who was named as a relief defendant for the purpose of recovering ill-gotten gains in her accounts resulting from her son's alleged illicit trading.
The default judgments, entered by U.S. District Judge Valerie E. Caproni for the Southern District of New York on May 5, 2017, permanently enjoins all of the defendants from violating Sections 10(b) and 20(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and defendants Hong and Chin from violating Exchange Act Section 14(e) and Rule 14e-3 thereunder. The judgments also order each of the defendants to disgorge all of their ill-gotten gains, together with prejudgment interest, and to pay a civil penalty equal to three times their respective disgorgement amounts. The judgments also order Hong's mother to fully disgorge, together with prejudgment interest, unlawful proceeds in her possession resulting from defendant Hong's illicit trading. The monetary relief ordered by the default judgments is reflected in the chart below:
The SEC appreciates the assistance of the U.S. Attorney's Office for Southern District of New York, Federal Bureau of Investigation, Hong Kong Securities and Futures Commission, and Financial Industry Regulatory Authority.