Gustavo Martinez v. Bensusan

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

__________________________________________
 )
SECURITIES AND EXCHANGE )
COMMISSION,  )
 )
 Plaintiff, )
 )
v. )
 ) Civil Action No.
CHARLIE JINAN CHEN, ) 18-10657-FDS
 )
Defendant, )
 )
 and )
 )
SHUI FOON MOK, )
 )
 Relief Defendant. )
__________________________________________)

MEMORANDUM AND ORDER ON DEFENDANT’S MOTION FOR
JUDGMENT AS A MATTER OF LAW OR FOR A NEW TRIAL
AND PLAINTIFF’S MOTION FOR ENTRY OF JUDGMENT

SAYLOR, C.J.
This is a civil-enforcement action brought by the Securities and Exchange Commission
against defendant Charlie Chen for insider trading in violation of Section 10(b) of the Securities
Exchange Act of 1934 and Section 17(a) of the Securities Act of 1933.  On February 3, 2020, a
jury found that, on several occasions in 2013 and 2014, Chen knowingly traded on material non-
public information provided to him by a family friend—either Jenny Ye or her husband Kevin
Xu.  (ECF 67).  The trading activity involved the securities of VistaPrint, N.V., an e-commerce
company where Ye worked, and had access to material non-public information at the time of the
charged conduct.  (ECF 87 at 5).

2

According to the evidence, the information Chen received from Ye or Xu enabled him to
purchase options ahead of several quarterly earnings announcements and profit from the
resulting price movement.  (Id. at 5).  Chen traded both in a brokerage account in his own name
and one in the name of his wife, Shui Foon Mok.  (ECF 92 at 8).  He gained nearly $900,000
from the scheme.  (ECF 77 Ex. 1 at 2).
After a five-day trial, the jury answered “yes” to the following question on the verdict
form:  “Even if you cannot identify by name which one, did either or both Jenny Ye and/or
Kevin Xu, for a personal benefit, breach a duty of trust to maintain as confidential and not to
disclose material, nonpublic information to Chen?”  (ECF 67 at 4).  However, the jury answered
“no” to two parallel questions:  “Did Jenny Ye, for a personal benefit, breach a duty of trust to
maintain as confidential and not to disclose material, nonpublic information to Charlie Chen?”
and “Did Kevin Xu, for a personal benefit, breach a duty of trust to maintain as confidential and
not to disclose material, nonpublic information to Charlie Chen?” (Id. at 2-3).
On February 18, 2020, the SEC moved for entry of final judgment.  (ECF 77).
Specifically, it seeks to permanently enjoin Chen from violating securities law, and requests
imposition of a $1,785,654 civil penalty, twice the value of his gains from the VistaPrint trades.
1

(ECF 77 at 1; ECF 91).
On February 24, 2020, Chen moved for judgment as a matter of law under Fed. R. Civ.
P. 50(b) or for a new trial under Fed. R. Civ. P. 59(a).  (ECF 79).  Chen argues principally that

1
 The SEC also initially requested disgorgement of $892,827, plus prejudgment interest that at the time
totaled $127,849.  (ECF 77 Ex. 1 at 2). The Commission has since rescinded that request in light of Liu v. SEC, 591
U.S. 71 (2020) (“A disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is
equitable relief permissible under [15 U.S.C.] § 78u(d)(5).”).

3

the jury’s verdict is inconsistent, that it cannot support liability for insider trading as a matter of
law, and that it is not supported by the weight of the evidence.  (Id. at 2-3).
This matter was reassigned to the undersigned judge on December 30, 2024.  (ECF 96).
I. Standard of Review
A. Rule 50(b)
A motion for judgment as a matter of law pursuant to Rule 50(b) is a challenge to the
legal sufficiency of evidence supporting the jury’s verdict.  See Fed. R. Civ. P. 50(a)(1) (2018);
see Cook v. State of R.I., Dep’t of Mental Health, Retardation & Hosps., 10 F.3d 17, 21 (1st Cir.
1993).  The motion is “subject to a demanding standard.”  Astrolabe, Inc. v. Esoteric Techs. PTY,
Ltd., No. 01-cv-11352-PBS, 2002 WL 511520, at *2 (D. Mass. Mar. 29, 2002).  The jury’s
verdict “must be upheld unless the facts and inferences, viewed in the light most favorable to the
verdict, point so strongly and overwhelmingly in favor of [the moving party] that a reasonable
jury could not have returned the verdict.”  Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d
1, 13 (1st Cir. 2009).  Put another way, judgment as a matter of law “is appropriate only where
‘there is a total lack of evidence in support of the plaintiff’s case.’”  Astrolabe, 2002 WL 511520,
at *2 (quoting Censullo v. Brenka Video, Inc., 989 F.2d 40, 42 (1st Cir. 1993)).
The court “may not consider the credibility of witnesses, resolve conflicts in testimony,
or evaluate the weight of the evidence.”  Barkan v. Dunkin’ Donuts, Inc., 627 F.3d 34, 39 (1st
Cir. 2010); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).  The
jury’s verdict must stand unless the evidence “points unerringly to an opposite conclusion.”
Zimmerman v. Direct Fed. Credit Union, 262 F.3d 70, 75 (1st Cir. 2001). This standard is
“weighted toward preservation of the jury verdict.”  Rinsky v. Cushman & Wakefield, Inc., 918
F.3d 8, 26 (1st Cir. 2019).

4

B. Rule 59(a)
A motion for a new trial under Rule 59(a) requires a new trial “only if the verdict is
against the law, against the weight of the credible evidence, or tantamount to a miscarriage of
justice.”  Crowe v. Marchand, 506 F.3d 13, 19 (1st Cir. 2007).  The evidence is again viewed in
the light most favorable to the verdict.  See Astro-Med, 591 F.3d at 13.  A “district judge cannot
displace a jury’s verdict merely because he disagrees with it” or because “a contrary verdict may
have been equally—or more easily—supportable.”  Ahern v. Scholz, 85 F.3d 774, 780 (1st Cir.
1996).  “The tide runs strongly against a litigant seeking to overturn a jury verdict.”  Climent-
García v. Autoridad de Transporte Marítimo y Las Islas Municipio, 754 F.3d 17, 20 (1st Cir.
2014). “When a party claims that jury verdicts are inconsistent, we attempt to reconcile the jury’s
findings, by exegesis if necessary.”  Davignon v. Hodgson, 524 F.3d 91, 109 (1st Cir. 2008).
II. Analysis
Defendant argues that he is entitled to judgment as a matter of law because the jury found
both that Jenny Ye did not disclose insider information to defendant and that Kevin Xu did not
disclose insider information to defendant.  (ECF 79 at 2-3).
Defendant also argues that the verdict was not supported by the weight of the evidence.
(Id. at 3).  He argues that no reasonable jury could find that any disclosure from Ye or Xu was
made for a personal benefit.  (Id.)  And he argues that the SEC’s reliance on summary charts
provides insufficient support for a finding of liability against him. (Id.)
A. “Tippee” Liability
A tippee may be found liable if he knows that inside information had been divulged in
breach of a duty for personal benefit, and he traded on the basis of that information.  See Salman
v. United States, 580 U.S. 39, 42 (2016); Dirks v. SEC, 463 U.S. 646, 653-64 (1983); United

5

States v. Bray, 853 F.3d 18, 28-29 (1st Cir. 2017); United States v. Parigian, 824 F.3d 5, 11 (1st
Cir. 2016); SEC v. Sargent, 229 F.3d 68, 74-75 (1st Cir. 2000).  A tippee “does not need to know
the details of the insider’s disclosure of information,” does “not have to know for certain how the
information was disclosed,” or have to know “the identity of the insiders.”  See United States v.
Newman, 773 F.3d 438, 449 n.3 (2d Cir. 2014), abrogated on other grounds by Salman, 137 S.Ct.
at 428; see also United States v. Goffer, 721 F.3d 113, 124 (2d Cir. 2013).  The government is
not required to “produce evidence of a trail or path of inside information from the insider to a
defendant.”  SEC v. Euro Sec. Fund, No. 98-CV-7347, 2000 WL 1376246, at *4 (S.D.N.Y. Sept.
25, 2000).  And it is not required to prove “the exact method that [an intermediate tippee]
obtained the information.”  United States v. Corbin, 729 F. Supp. 2d 603, 606 (S.D.N.Y. 2010).
Instead, it is sufficient that there is evidence that he was aware that material nonpublic
information had been improperly communicated for some benefit.  See Salman, 580 U.S. at 42.
As an initial matter, any objection to the consistency of the verdict is waived, because
defendant did not object to it before the jury was dismissed.  See Burnett v. Ocean Properties,
Ltd., 987 F.3d 57, 72 (1st Cir. 2021) (“[A] party waives the issue of inconsistency if it fails to
object after the verdict is read and before the jury is dismissed.”).  I  n any event, reasonable jurors
could have interpreted the three disputed questions on the verdict form as exclusive, rather than
overlapping.  (ECF 67 at 2-4; Trial Tr. Day 5 at 128-129).  For example, if they believed the
information came from both Ye and Xu, they reasonably could have believed that they should
only write “Yes” on the choice that indicated disclosure by either Ye, Xu, or both.  (Trial Tr. Day
5 at 128-129).  The verdict therefore can be “reconcile[d]” to establish Chen’s liability, even if
the issue had not been waived.  Davignon, 524 F.3d at 109.

6

Furthermore, the verdict as stated does not preclude a finding that Chen is liable for
insider trading.  The jury found that “either or both Jenny Ye and/or Kevin Xu, for a personal
benefit, breach[ed] a duty of trust to maintain as confidential and not to disclose material,
nonpublic information to Chen.”  (ECF 67 at 4).  That finding, interpreted in the light most
favorable to the verdict, reflects the jury’s certainty that disclosure happened, but uncertainty
about the mechanism of the disclosure.  That is an entirely permissible basis for liability, because
the jury went on to find that Chen knew he had received material non-public information from
either Ye, Xu, or both, and that he then traded on that information.  (Id. at 8).  Together, those
findings support liability for insider trading.  See Salman, 580 U.S. at 42.
Defendant is therefore not entitled to judgment as a matter of law on that basis.
B. Weight of the Evidence
There is more than sufficient evidence to support a jury finding that either Ye or Xu
disclosed material non-public information to Chen.  The government introduced substantial
evidence at trial about the extensive communication between Chen’s family and the family of Ye
and Xu.  (ECF 87 at 5; Trial Tr. Day 4 at 13).  That evidence supported an inference that, at the
very least, either Ye or Xu had an opportunity to tip Chen before the release of the VistaPrint
quarterly earnings reports.  That, combined with Chen’s subsequent trading behavior, is strong
circumstantial evidence of insider trading that a rational jury could credit.
There is also sufficient evidence to support the jury’s finding that, regardless of who
tipped Chen, the tip was undertaken for personal benefit.  Tips are given for personal benefit
when they are given to friends as gifts.  See Salman, 580 U.S. 42 (citing Dirks, 463 U.S. at 664).
Furthermore, the government introduced evidence that Ye and Xu wanted to go on vacation with
Chen’s family, but that Chen’s family often could not afford to vacation with them.  (Trial Tr.

7

Day 4 at 88).  A reasonable jury could have found, based on that evidence, that Ye or Xu
disclosed material non-public information to Chen for a personal benefit.
Finally, the summaries at issue were not improperly admitted.  Summaries are admissible
under the rules of evidence.  See Fed. R. Evid. 1006.  Therefore, assuming the government’s
summaries were properly admitted and shown to the jury under Rule 1006—which defendant
does not contest—the mere fact that the government relied on summaries does not make the
underlying evidence attenuated or insufficient.
Defendant therefore has not shown that he is entitled to a new trial on any of those bases.
III. Civil Penalties

The parties agree that Chen may be enjoined from violating the Securities Act, the
Exchange Act, and the rules promulgated under the authority of those Acts.  (ECF 83 at 8).  They
also agree that disgorgement and prejudgment interest should not be ordered.  (ECF 91).
Therefore, the only remaining issue is the appropriate civil penalty, if any, under 15 U.S.C. 78u-
1(a)(2).
The government has requested the Court enter a judgment against defendant that includes
$1,785,654 in civil penalties, twice the value of his profits from insider trading.  (ECF 91 at 2).
Defendant responds that the extra penalty is inappropriate in this case, largely because it would
impose a crippling financial burden on him, and because he was acquitted in a parallel criminal
prosecution.  (ECF 83 at 6-8).
The appropriate magnitude of a civil penalty for insider trading is based on the “facts and
circumstances” of the case.  15 U.S.C. 78u-1(a)(2).  The factors that bear on this inquiry are “(1)
the egregiousness of the violations; (2) the isolated or repeated nature of the violations; (3) the
defendant's financial worth; (4) whether the defendant concealed his trading; (5) what other

8
penalties arise as the result of the defendant's conduct; and (6) whether the defendant is
employed in the securities industry.”  S.E.C. v. Happ, 392 F.3d 12, 32 (1st Cir. 2004).
Here, as in Happ, the picture is mixed.  On the one hand, the jury found that defendant
engaged in repeated violations.  (ECF 67 at 12).  He also appears to have done so in a way that
was difficult to detect and consequently difficult to deter.  He did not conceal the fact of his
trades, but did lie to the FBI about his relationship with Ye and Xu, presumably to conceal his
wrongdoing.  (Trial Tr. Day 2 at 153).  Nevertheless, it appears that he is not a person of
substantial means.  (ECF 92).  Furthermore, his violation was not substantially more egregious
than a typical insider-trading violation, and he does not work in the securities industry, which
perhaps marginally reduces the temptation to reoffend.  Accordingly, as in Happ, the Court will
impose a penalty equivalent to the value of defendant’s illicit trades, which is $892,827.  That
penalty will be paid according to a reasonable installment schedule based on his ability to pay.
IV.C
onclusion
For the foregoing reasons, defendant’s motion for judgment as a matter of law or, in the
alternative, for a new trial is DENIED.  Plaintiff’s motion for entry of judgment is GRANTED in
part and DENIED in part.
The clerk is directed to enter final judgment against the defendant consistent with this
order.
So Ordered.
/s/  F. Dennis Saylor IV
F. Dennis Saylor IV
Dated:   January 30, 2025 Chief Judge, United States District Court

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

 
__________________________________________ 
 ) 
SECURITIES AND EXCHANGE )  
COMMISSION,  ) 
 ) 
 Plaintiff, )  

 )  
v. )  

 ) Civil Action No. 
CHARLIE JINAN CHEN, ) 18-10657-FDS 
 ) 

Defendant, ) 
 ) 
 and ) 

 ) 
SHUI FOON MOK, ) 
 ) 
 Relief Defendant. ) 
__________________________________________) 
 
 

MEMORANDUM AND ORDER ON DEFENDANT’S MOTION FOR  
JUDGMENT AS A MATTER OF LAW OR FOR A NEW TRIAL  

AND PLAINTIFF’S MOTION FOR ENTRY OF JUDGMENT 
 
SAYLOR, C.J. 

This is a civil-enforcement action brought by the Securities and Exchange Commission 

against defendant Charlie Chen for insider trading in violation of Section 10(b) of the Securities 

Exchange Act of 1934 and Section 17(a) of the Securities Act of 1933.  On February 3, 2020, a 

jury found that, on several occasions in 2013 and 2014, Chen knowingly traded on material non-

public information provided to him by a family friend—either Jenny Ye or her husband Kevin 

Xu.  (ECF 67).  The trading activity involved the securities of VistaPrint, N.V., an e-commerce 

company where Ye worked, and had access to material non-public information at the time of the 

charged conduct.  (ECF 87 at 5). 

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2 

 

According to the evidence, the information Chen received from Ye or Xu enabled him to 

purchase options ahead of several quarterly earnings announcements and profit from the 

resulting price movement.  (Id. at 5).  Chen traded both in a brokerage account in his own name 

and one in the name of his wife, Shui Foon Mok.  (ECF 92 at 8).  He gained nearly $900,000 

from the scheme.  (ECF 77 Ex. 1 at 2).   

After a five-day trial, the jury answered “yes” to the following question on the verdict 

form:  “Even if you cannot identify by name which one, did either or both Jenny Ye and/or 

Kevin Xu, for a personal benefit, breach a duty of trust to maintain as confidential and not to 

disclose material, nonpublic information to Chen?”  (ECF 67 at 4).  However, the jury answered 

“no” to two parallel questions:  “Did Jenny Ye, for a personal benefit, breach a duty of trust to 

maintain as confidential and not to disclose material, nonpublic information to Charlie Chen?” 

and “Did Kevin Xu, for a personal benefit, breach a duty of trust to maintain as confidential and 

not to disclose material, nonpublic information to Charlie Chen?” (Id. at 2-3). 

On February 18, 2020, the SEC moved for entry of final judgment.  (ECF 77).  

Specifically, it seeks to permanently enjoin Chen from violating securities law, and requests 

imposition of a $1,785,654 civil penalty, twice the value of his gains from the VistaPrint trades.1  

(ECF 77 at 1; ECF 91). 

On February 24, 2020, Chen moved for judgment as a matter of law under Fed. R. Civ. 

P. 50(b) or for a new trial under Fed. R. Civ. P. 59(a).  (ECF 79).  Chen argues principally that 

 
1 The SEC also initially requested disgorgement of $892,827, plus prejudgment interest that at the time 

totaled $127,849.  (ECF 77 Ex. 1 at 2). The Commission has since rescinded that request in light of Liu v. SEC, 591 
U.S. 71 (2020) (“A disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is 
equitable relief permissible under [15 U.S.C.] § 78u(d)(5).”).  

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3 

 

the jury’s verdict is inconsistent, that it cannot support liability for insider trading as a matter of 

law, and that it is not supported by the weight of the evidence.  (Id. at 2-3). 

This matter was reassigned to the undersigned judge on December 30, 2024.  (ECF 96). 

I. Standard of Review 

A. Rule 50(b) 

A motion for judgment as a matter of law pursuant to Rule 50(b) is a challenge to the 

legal sufficiency of evidence supporting the jury’s verdict.  See Fed. R. Civ. P. 50(a)(1) (2018); 

see Cook v. State of R.I., Dep’t of Mental Health, Retardation & Hosps., 10 F.3d 17, 21 (1st Cir. 

1993).  The motion is “subject to a demanding standard.”  Astrolabe, Inc. v. Esoteric Techs. PTY, 

Ltd., No. 01-cv-11352-PBS, 2002 WL 511520, at *2 (D. Mass. Mar. 29, 2002).  The jury’s 

verdict “must be upheld unless the facts and inferences, viewed in the light most favorable to the 

verdict, point so strongly and overwhelmingly in favor of [the moving party] that a reasonable 

jury could not have returned the verdict.”  Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 

1, 13 (1st Cir. 2009).  Put another way, judgment as a matter of law “is appropriate only where 

‘there is a total lack of evidence in support of the plaintiff’s case.’”  Astrolabe, 2002 WL 511520, 

at *2 (quoting Censullo v. Brenka Video, Inc., 989 F.2d 40, 42 (1st Cir. 1993)).   

The court “may not consider the credibility of witnesses, resolve conflicts in testimony, 

or evaluate the weight of the evidence.”  Barkan v. Dunkin’ Donuts, Inc., 627 F.3d 34, 39 (1st 

Cir. 2010); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).  The 

jury’s verdict must stand unless the evidence “points unerringly to an opposite conclusion.”  

Zimmerman v. Direct Fed. Credit Union, 262 F.3d 70, 75 (1st Cir. 2001). This standard is 

“weighted toward preservation of the jury verdict.”  Rinsky v. Cushman & Wakefield, Inc., 918 

F.3d 8, 26 (1st Cir. 2019). 

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4 

 

B. Rule 59(a) 

A motion for a new trial under Rule 59(a) requires a new trial “only if the verdict is 

against the law, against the weight of the credible evidence, or tantamount to a miscarriage of 

justice.”  Crowe v. Marchand, 506 F.3d 13, 19 (1st Cir. 2007).  The evidence is again viewed in 

the light most favorable to the verdict.  See Astro-Med, 591 F.3d at 13.  A “district judge cannot 

displace a jury’s verdict merely because he disagrees with it” or because “a contrary verdict may 

have been equally—or more easily—supportable.”  Ahern v. Scholz, 85 F.3d 774, 780 (1st Cir. 

1996).  “The tide runs strongly against a litigant seeking to overturn a jury verdict.”  Climent-

García v. Autoridad de Transporte Marítimo y Las Islas Municipio, 754 F.3d 17, 20 (1st Cir. 

2014). “When a party claims that jury verdicts are inconsistent, we attempt to reconcile the jury’s 

findings, by exegesis if necessary.”  Davignon v. Hodgson, 524 F.3d 91, 109 (1st Cir. 2008). 

II. Analysis 

Defendant argues that he is entitled to judgment as a matter of law because the jury found 

both that Jenny Ye did not disclose insider information to defendant and that Kevin Xu did not 

disclose insider information to defendant.  (ECF 79 at 2-3). 

Defendant also argues that the verdict was not supported by the weight of the evidence.  

(Id. at 3).  He argues that no reasonable jury could find that any disclosure from Ye or Xu was 

made for a personal benefit.  (Id.)  And he argues that the SEC’s reliance on summary charts 

provides insufficient support for a finding of liability against him. (Id.) 

A. “Tippee” Liability 

A tippee may be found liable if he knows that inside information had been divulged in 

breach of a duty for personal benefit, and he traded on the basis of that information.  See Salman 

v. United States, 580 U.S. 39, 42 (2016); Dirks v. SEC, 463 U.S. 646, 653-64 (1983); United 

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5 

 

States v. Bray, 853 F.3d 18, 28-29 (1st Cir. 2017); United States v. Parigian, 824 F.3d 5, 11 (1st 

Cir. 2016); SEC v. Sargent, 229 F.3d 68, 74-75 (1st Cir. 2000).  A tippee “does not need to know 

the details of the insider’s disclosure of information,” does “not have to know for certain how the 

information was disclosed,” or have to know “the identity of the insiders.” See United States v. 

Newman, 773 F.3d 438, 449 n.3 (2d Cir. 2014), abrogated on other grounds by Salman, 137 S.Ct. 

at 428; see also United States v. Goffer, 721 F.3d 113, 124 (2d Cir. 2013).  The government is 

not required to “produce evidence of a trail or path of inside information from the insider to a 

defendant.”  SEC v. Euro Sec. Fund, No. 98-CV-7347, 2000 WL 1376246, at *4 (S.D.N.Y. Sept. 

25, 2000).  And it is not required to prove “the exact method that [an intermediate tippee] 

obtained the information.”  United States v. Corbin, 729 F. Supp. 2d 603, 606 (S.D.N.Y. 2010).  

Instead, it is sufficient that there is evidence that he was aware that material nonpublic 

information had been improperly communicated for some benefit.  See Salman, 580 U.S. at 42. 

As an initial matter, any objection to the consistency of the verdict is waived, because 

defendant did not object to it before the jury was dismissed.  See Burnett v. Ocean Properties, 

Ltd., 987 F.3d 57, 72 (1st Cir. 2021) (“[A] party waives the issue of inconsistency if it fails to 

object after the verdict is read and before the jury is dismissed.”).  In any event, reasonable jurors 

could have interpreted the three disputed questions on the verdict form as exclusive, rather than 

overlapping.  (ECF 67 at 2-4; Trial Tr. Day 5 at 128-129).  For example, if they believed the 

information came from both Ye and Xu, they reasonably could have believed that they should 

only write “Yes” on the choice that indicated disclosure by either Ye, Xu, or both.  (Trial Tr. Day 

5 at 128-129).  The verdict therefore can be “reconcile[d]” to establish Chen’s liability, even if 

the issue had not been waived.  Davignon, 524 F.3d at 109. 

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6 

 

Furthermore, the verdict as stated does not preclude a finding that Chen is liable for 

insider trading.  The jury found that “either or both Jenny Ye and/or Kevin Xu, for a personal 

benefit, breach[ed] a duty of trust to maintain as confidential and not to disclose material, 

nonpublic information to Chen.”  (ECF 67 at 4).  That finding, interpreted in the light most 

favorable to the verdict, reflects the jury’s certainty that disclosure happened, but uncertainty 

about the mechanism of the disclosure.  That is an entirely permissible basis for liability, because 

the jury went on to find that Chen knew he had received material non-public information from 

either Ye, Xu, or both, and that he then traded on that information.  (Id. at 8).  Together, those 

findings support liability for insider trading.  See Salman, 580 U.S. at 42.   

Defendant is therefore not entitled to judgment as a matter of law on that basis. 

B. Weight of the Evidence 

There is more than sufficient evidence to support a jury finding that either Ye or Xu 

disclosed material non-public information to Chen.  The government introduced substantial 

evidence at trial about the extensive communication between Chen’s family and the family of Ye 

and Xu.  (ECF 87 at 5; Trial Tr. Day 4 at 13).  That evidence supported an inference that, at the 

very least, either Ye or Xu had an opportunity to tip Chen before the release of the VistaPrint 

quarterly earnings reports.  That, combined with Chen’s subsequent trading behavior, is strong 

circumstantial evidence of insider trading that a rational jury could credit. 

There is also sufficient evidence to support the jury’s finding that, regardless of who 

tipped Chen, the tip was undertaken for personal benefit.  Tips are given for personal benefit 

when they are given to friends as gifts.  See Salman, 580 U.S. 42 (citing Dirks, 463 U.S. at 664).  

Furthermore, the government introduced evidence that Ye and Xu wanted to go on vacation with 

Chen’s family, but that Chen’s family often could not afford to vacation with them.  (Trial Tr. 

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7 

 

Day 4 at 88).  A reasonable jury could have found, based on that evidence, that Ye or Xu 

disclosed material non-public information to Chen for a personal benefit. 

Finally, the summaries at issue were not improperly admitted.  Summaries are admissible 

under the rules of evidence.  See Fed. R. Evid. 1006.  Therefore, assuming the government’s 

summaries were properly admitted and shown to the jury under Rule 1006—which defendant 

does not contest—the mere fact that the government relied on summaries does not make the 

underlying evidence attenuated or insufficient. 

Defendant therefore has not shown that he is entitled to a new trial on any of those bases.   

III. Civil Penalties 
 

The parties agree that Chen may be enjoined from violating the Securities Act, the 

Exchange Act, and the rules promulgated under the authority of those Acts.  (ECF 83 at 8).  They 

also agree that disgorgement and prejudgment interest should not be ordered.  (ECF 91).  

Therefore, the only remaining issue is the appropriate civil penalty, if any, under 15 U.S.C. 78u-

1(a)(2). 

The government has requested the Court enter a judgment against defendant that includes 

$1,785,654 in civil penalties, twice the value of his profits from insider trading.  (ECF 91 at 2).  

Defendant responds that the extra penalty is inappropriate in this case, largely because it would 

impose a crippling financial burden on him, and because he was acquitted in a parallel criminal 

prosecution.  (ECF 83 at 6-8).   

The appropriate magnitude of a civil penalty for insider trading is based on the “facts and 

circumstances” of the case.  15 U.S.C. 78u-1(a)(2).  The factors that bear on this inquiry are “(1) 

the egregiousness of the violations; (2) the isolated or repeated nature of the violations; (3) the 

defendant's financial worth; (4) whether the defendant concealed his trading; (5) what other 

Case 1:18-cv-10657-FDS     Document 97     Filed 01/30/25     Page 7 of 8



8 

penalties arise as the result of the defendant's conduct; and (6) whether the defendant is 

employed in the securities industry.”  S.E.C. v. Happ, 392 F.3d 12, 32 (1st Cir. 2004). 

Here, as in Happ, the picture is mixed.  On the one hand, the jury found that defendant 

engaged in repeated violations.  (ECF 67 at 12).  He also appears to have done so in a way that 

was difficult to detect and consequently difficult to deter.  He did not conceal the fact of his 

trades, but did lie to the FBI about his relationship with Ye and Xu, presumably to conceal his 

wrongdoing.  (Trial Tr. Day 2 at 153).  Nevertheless, it appears that he is not a person of 

substantial means.  (ECF 92).  Furthermore, his violation was not substantially more egregious 

than a typical insider-trading violation, and he does not work in the securities industry, which 

perhaps marginally reduces the temptation to reoffend.  Accordingly, as in Happ, the Court will 

impose a penalty equivalent to the value of defendant’s illicit trades, which is $892,827.  That 

penalty will be paid according to a reasonable installment schedule based on his ability to pay. 

IV. Conclusion

For the foregoing reasons, defendant’s motion for judgment as a matter of law or, in the

alternative, for a new trial is DENIED.  Plaintiff’s motion for entry of judgment is GRANTED in 

part and DENIED in part.   

The clerk is directed to enter final judgment against the defendant consistent with this 

order.   

So Ordered. 

/s/  F. Dennis Saylor IV 
F. Dennis Saylor IV

Dated:  January 30, 2025 Chief Judge, United States District Court

Case 1:18-cv-10657-FDS     Document 97     Filed 01/30/25     Page 8 of 8