A former IT guy working with the Washington-based Expedia Inc. (NASDAQ:EXPE) has admitted that he made more than $300,000 by hacking the executives of his own company. Jonathan Ly said on Monday the money was made by illegally traded secrets that he discovered by hacking into the company’s senior executives.
Insider Trading Nets Ly $331,000
Ly was able to steal passwords and get into the devices of the top execs of Expedia, such as the head of the company’s investor relations and Chief Financial Officer. He had the technical abilities to access electronic devices used by senior executives remotely to read emails and documents containing confidential information. Armed with the information thus obtained, he then proceeded to make “highly profitable” trades in stock options. This netted him a total of $331,000.
Ly was working in the company’s Hotwire.com division as a senior IT technician. Prosecutors said that there have been many hacking incidents between 2013 and as late as this year. Among the information he accessed includes how the market could react based on announcements Expedia made.
Prosecutors said that Ly left Expedia (NASDAQ:EXPE) in 2015, but did not return a laptop that was with him. This allowed him to keep hacking into the top executives, even though he was no more an employee of the business.
Jonathan Ly Will Now Have to Repay the Money
Appearing before the U.S. District Court in Seattle, he pleaded guilty. The court did not take too kindly to his deeds and ordered the 28-year-old technician to repay the money he made from insider trading.
In fact, he will end up paying much more – $81,592 to be precise to Expedia for the money the business spent in investigating the hacking. The FBI was also investigating the incident. There was also a settlement reached with the U.S. Securities and Exchange Commission for $375,907. The sentence is likely to be announced on February 28. He may face a severe jail term as there is provision for 25 years prison in securities fraud.
U.S. Attorney Annette Hayes issued a statement saying, “The irony of our increasingly digital world is that the greatest threat to our networks is a human one”.
John Runfola, who represented Jonathan Ly, said his client was “deeply sorry” and that “he has certainly learned his lesson”. John went on to add that he is a young man from a poor background.