FOR IMMEDIATE RELEASE

2020-27

Yesterday evening, jurors in Boston federal court returned a verdict finding that Lexington, Massachusetts restauranteur Charlie Chen engaged in illegal insider trading in advance of five earnings announcements of Lexington-based company Vistaprint, N.V.

The SEC's evidence at trial showed that Chen, who was close friends with a Vistaprint insider and her husband, received highly confidential nonpublic information and used it to place trades in advance of five different announcements of Vistaprint's financial results from April 2013 through July 2014. On some occasions, Chen placed extremely aggressive bets such as wagering much of his retirement account on risky Vistaprint options before the company's announcement of disappointing earnings results in April 2014. According to evidence presented at the trial, Chen made over $800,000 in illicit trading profits. The evidence at trial also showed that, upon being questioned by the FBI in 2016, Chen claimed that he did not know anyone who worked at Vistaprint and falsely denied having a close relationship with the Vistaprint insider and her husband with whom he and his family had vacationed.

"Chen’s conduct involved repeated misuse of confidential financial information to gain an unfair advantage and reap illegal profits," said Joseph G. Sansone, Chief of the SEC's Market Abuse Unit. "The SEC continues to devote its resources and expertise to ferreting out insider traders and holding them accountable."

The jury found Chen liable on all counts, finding that he violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. The SEC is seeking disgorgement of Chen's insider trading profits and may seek civil penalties of up to three times the amount of Chen's ill-gotten gains.

The SEC's claims, which were originally filed in April 2018, are being litigated by Eric Forni and Susan Cooke Anderson of the Boston Regional Office. The investigation that led to the action was conducted by David H. London and John McCann of the SEC's Boston Regional Office and Michele T. Perillo of the Market Abuse Unit in the Boston Regional Office.