More Charges Come to Light in FitBit Fraud
The SEC has filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit securities through false regulatory filings.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The U.S. Securities and Exchange Commission (SEC) recently filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit Inc. (NYSE: FIT) securities through false regulatory filings.
According to the SEC, Mark E. Burns purchased Fitbit call options just minutes before he and his co-conspirator, Robert W. Murray, filed a fake tender offer on the SEC’s EDGAR system purporting to acquire Fitbit’s shares at a substantial premium.
The SEC charged Murray last year and he recently was sentenced to prison in a parallel criminal case. The false tender offer was made in the name of ABM Capital, a nonexistent company for which the defendants created an EDGAR account. Fitbit’s stock price temporarily spiked when the tender offer became publicly available on November 10, 2016, and Burns sold all of his options for a 350% profit of approximately $13,000.
[nativounit]
Robert A. Cohen, chief of the Cyber Unit, commented:
We allege that Burns and Murray tried to camouflage their identities and their affiliation with an EDGAR account by using disguised IP and e-mail addresses. Despite their sophisticated efforts to avoid detection, we stopped their alleged abuse of our filing system and charged them with being responsible for this manipulation.
The SEC’s complaint charges Burns with violating antifraud provisions of the federal securities laws. Murray has agreed to settle the SEC’s charges against him. The settlement is subject to court approval.
Shares of Fitbit were last seen down about 2.5% at $6.76, with a consensus analyst price target of $6.10 and a 52-week trading range of $4.51 to $7.79.
[recirclink id=475976]
[wallst_email_signup]
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
