×

Virginia man charged with Fitbit stock hoax pleads guilty

NEW YORK, Nov 7 (Reuters) - A Virginia man accused by U.S. prosecutors of driving up the price of Fitbit Inc stock by orchestrating a hoax takeover bid, making about $3,000 in profit, pleaded guilty to securities fraud on Tuesday.

Robert Walter Murray, of Chesapeake, Virginia, entered his plea before U.S. District Judge Katherine Forrest in Manhattan, the office of Acting U.S. Attorney Joon Kim announced.

According to a written plea agreement, Murray has pledged not to appeal any sentence of 6-1/2 years or less. He is scheduled to be sentenced by Forrest on March 9.

Christopher Flood, a court-appointed lawyer representing Murray, could not immediately be reached for comment Tuesday evening.

Murray, 24, was arrested in May 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 Fitbits share price to rise 8 percent to $9.27 on Nov. 10, boosting the companys market value by $122 million, before the San Francisco-based maker of step counters and other wearable devices denied knowledge of any tender offer.

Authorities said Murray had 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 him. The hoax filing was submitted through the SECs 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, ABMs purported chief financial officer. (Reporting By Brendan Pierson in New York; Additional reporting by Jonathan Stempel in New York; editing by Diane Craft)