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Salem Radio Network News Wednesday, October 18, 2017

U.S.

U.S. charges Virginia man with Fitbit stock hoax

NEW YORK (Reuters) – A Virginia man accused of being the architect of a hoax tender offer that drove up the stock price of Fitbit Inc last November has been arrested and charged with fraud, U.S. prosecutors said on Friday.

Robert Walter Murray was accused of submitting a filing last Nov. 9 to the U.S. Securities and Exchange Commission on behalf of a previously unknown Chinese entity, ABM Capital Ltd, and offering to buy all outstanding Fitbit shares at $12.50 each, 46 percent above where they had been trading.

Prosecutors said the share price of the maker of step counters and other wearable devices rose 8 percent, boosting Fitbit’s market value by about $122 million, before the San Francisco-based company denied knowledge of any tender offer.

Murray allegedly spent $997 on Fitbit call options, a bet the share price would rise, just before the filing became public, and made a $2,917 profit by selling them shortly afterward, prosecutors said.

The defendant was charged with securities fraud and wire fraud, and faces up to 20 years in prison on each charge.

It is unclear whether Murray has a lawyer, and a federal public defender is expected to represent him at an initial hearing.

The SEC filed related civil charges against Murray.

Fitbit was not accused of wrongdoing, and did not immediately respond to a request for comment.

(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)

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