NEW YORK (Reuters) - A Virginia man was sentenced to two years in prison on Friday after he pleaded guilty to driving up the price of Fitbit Inc stock by orchestrating a hoax takeover bid, making about $3,000 in profit.
Robert Walter Murray, of Chesapeake, Virginia, was sentenced by U.S. District Judge Katherine Forrest in Manhattan, according to the office of U.S. Attorney Geoffrey Berman. Christopher Flood, a lawyer for Murray, could not immediately be reached for comment.
As part of his plea deal, Murray agreed not to appeal any sentence of 6-1/2 years or less.
Murray, 25, was arrested in May 2017 and charged with submitting a sham regulatory filing in which the nonexistent, Shanghai-based ABM Capital Ltd offered to buy Fitbit for $12.50 per share, roughly a 46 percent premium.
The filing caused Fitbit’s share price to rise 8 percent to $9.27 on Nov. 10, boosting the company’s market value by $122 million, before the San Francisco-based maker of footstep counters and other wearable devices denied knowledge of any tender offer.
Authorities said Murray spent less than $1,000 on Fitbit call options, a bet the share price would rise, just before submitting the hoax offer. They said he made about $3,000 profit in one day by selling the options after the stock jumped.
The U.S. Securities and Exchange Commission filed related civil charges against Murray. The hoax filing was submitted through the SEC’s electronic Edgar database.
The SEC said Murray concealed his identity by accessing Edgar through an account that appeared to be associated with a company in Napa, California, and having the filing signed by a Kevin Mead, ABM Capital’s purported chief financial officer.
Reporting by Brendan Pierson in New York; Editing by Tom Brown