NEW YORK – A Chesapeake native will serve two years in prison for manipulating the market for Fitbit’s stock prices.
Robert Walter Murray, 25, was sentenced after pleading guilty on November 7, 2017, to filing a sham tender offer with the Securities and Exchange Commission (“SEC”) in November 2016, according to officials with the Department of Justice.
According to court documents, “on November 8, 2016, Murray falsely purporting to be an officer at a China-based entity called ABM Capital, created an account on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (or “EDGAR”) system. The next day, MURRAY submitted a filing on EDGAR that reported that ABM Capital had offered to purchase Fitbit for approximately $12.50 a share, a significant premium to the price of Fitbit stock at the time. This filing was made public on November 10, 2016, and, when it was, Fitbit’s stock temporarily increased in response to the news. While Fitbit’s stock had closed at approximately $8.55 a share on November 9, 2016, it reached a high of approximately $9.27 per share, with significantly increased trading volume, after MURRAY’s fake tender offer filing was made public. This resulted in a temporary increase of Fitbit’s market capitalization of around $100 million. The tender offer that MURRAY filed, however, was entirely fictitious, and was instead meant only to increase the value of options in Fitbit stock that MURRAY had purchased just days earlier.”
The manipulation resulted in a temporary change in Fitbit’s market capitalization of over $100 million dollars.
“Robert Murray manipulated the market in Fitbit stock by making a false filing with the SEC about a tender offer. Hoping to take a quick profit from trading in Fitbit stock options, Murray’s attempt to game the system has instead earned him a federal prison sentence,” said U.S. Attorney Geoffrey S. Berman.
Murray will also have to serve two years of supervised release after his two years in prison. He will also have to forfeit a sum of $3,914.