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SEC pursues Fitbit stock manipulation scheme

Joe Mont | July 11, 2018

The Securities and Exchange Commission this week filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit securities through false regulatory filings. 

According to the SEC’s complaint, Mark Burns purchased Fitbit call options just minutes before he and his co-conspirator, Robert 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 was recently 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 Nov. 10, 2016, and Burns sold his options for a 350-percent profit of approximately $13,000.   

The SEC’...

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