Expedia IT bod gets all-expenses-paid trip to prison after hacking execs' emails for profit
Blames pricey SF rent for $350,000 insider-trading scam
An ex-Expedia IT admin has been fined and jailed for 15 months after he spied on the emails of the travel giant's top brass to make insider trades.
According to documents filed in the US district court of Seattle, Washington, Jonathan Ly was hired by Expedia in March 2013 as a mid-level tech support bod. Within three months, the then-23-year-old started poking around the corp's servers. He found a passwords file in an account belonging to an IT department boss, which opened every corporate email inbox to the greedy geek.
Ly told the court that, as the son of poor immigrants, he was fascinated by the lives of the rich, and thus began spying on the email of senior executives such as the chief financial officer and Expedia's head of investor relations. Then he used their files and messages to launch trades of company stock using this insider information.
At the time, Ly lived in San Francisco, California. He claimed he needed the dirty money because he had split up with his girlfriend and was forced into the city's staggeringly expensive rental market. Now rent is stupidly high here, but the $348,515.72 Ly netted over roughly two years seems a little excessive.
The crooked nerd made a series of trades in Expedia stock, mainly utilizing foreknowledge of the company's quarterly earnings statements. His first trade in July 2013 netted him $57,549.22, and from then on, he averaged $44,632 in illicit profits per quarter. He also netted $18,718.50 and $17,375.14 thanks to foreknowledge of a deal with Travelocity, and Expedia's takeover of Orbitz, respectively. To put that into context, the average salary of an Expedia IT support technician is around $52,000, according to Glassdoor.
In April 2015, Ly quit Seattle-based Expedia and moved to a similar job at Adobe in the Bay Area, but he kept his work laptop with the passwords file – and continued his email monitoring and trading. He made his last trade the week before the FBI came knocking on his door.
Ly was fired by Adobe after he admitted securities fraud. On Tuesday this week, he was sent down. On the plus side, the 28-year-old won't have to worry about rent any more, since Uncle Sam picks up the tab during his stay in the big house.
Once he gets out, however, Ly will probably have to move home, since he has some serious bills to pay. The Washington state judge ordered him to cough up $375,907 and pay his former employer $81,592 to cover the costs of its investigation. ®