A US man has been arrested and charged in connection with a US$100 million stock manipulation involving shares of the wearable technology maker Fitbit Inc, US federal prosecutors said on Friday.
Virginia mechanical engineer Robert Murray was due to appear before a Manhattan federal judge.
He faces parallel civil charges brought by the US Securities and Exchange Commission (SEC).
Officials said Murray in November last year submitted a fake offer to buy all outstanding Fitbit shares at a premium above their price at the time, manipulating the market by more than US$100 million.
Just minutes before submitting the fake tender offer, Murray allegedly bought call options which he then sold after the share price temporarily spiked, creating a US$3,100 profit for Murray.
“After profiting at the expense of the public, Murray allegedly took elaborate steps to hide that he was behind the fraud,” Acting US Attorney in Manhattan Joon Kim said in a statement. “Our office remains committed to ensuring that the securities markets are fair and free from manipulation.”
Shares in Fitbit are down 35 percent on the New York Stock Exchange since November last year, driven in large part by weaker sales projections.
Investigators said Murray submitted the phony tender while purporting to be the officer of a China-based entity called ABM Capital Ltd.
To submit the tender, Murray used a fake e-mail account, which IP address logs showed was indirectly connected to him, his family and place of work, according to an affidavit from a US Postal Inspector filed in court.
Murray faces charges of securities fraud and wire fraud, which carry maximum penalties of 20 years in prison each, and fines of US$5 million, or twice the gross gain or loss from the offense.
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