A 25-year-old man who invented a bogus buyer to manipulate the price of Fitbit stock and cash in was sentenced Friday to two years in prison.
Robert W. Murray told a New York federal judge he deeply regretted having done "one of the stupidest things I can imagine anyone ever doing."
While Murray didn't make a killing — federal regulators put his profits at about $3,000 — U.S. District Judge Katherine Forrest said there was more at stake.
"You undertook a crime that needs to be treated seriously in our society because so much of our financial well-being depends on a well-functioning capital market," she said.
Full Prosecutors' Statement Against Jussie Smollett
Murray, a mechanical engineer from Chesapeake, Virginia, pleaded guilty last November to securities fraud.
Prosecutors say he filed a regulatory document in November 2016 saying a fictitious company had offered to buy fitness tracker maker Fitbit at well over its share price. He used someone else's name — scrounged from the internet — to claim he was an officer in the phony company and took steps to disguise his computer's internet address, according to prosecutors and the federal Securities and Exchange Commission.
The stock briefly shot up about 10 percent, and Murray sold Fitbit stock options he had. Other investors ended up paying artificially inflated prices, according to the SEC, which has an ongoing civil lawsuit against Murray.
San Francisco-based Fitbit Inc. declined to comment.
Murray's lawyer, Christopher Flood, said the crime happened when his client was at "a significant emotional low point" after a difficult breakup. The stock-market novice didn't fully grasp the wider impact of his action, his lawyer said.
But Assistant U.S. Attorney Robert Allen said the crime "goes to the heart of the markets that rely on the integrity of participants."