U.S. Securities and Exchange Commission (SEC) on Friday charged Massachusetts man Robert Scott Murray, and his company, Trillium Capital LLC, with a fraudulent scheme to manipulate the stock price of Getty Images Holdings Inc (NYSE:GETY).
What Happened: The SEC accused Murray and Trillium of orchestrating a fraudulent scheme to inflate the stock price of Getty Images by falsely announcing a buyout offer from Trillium.
The SEC's complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that Murray and Trillium issued press releases in early April 2023, urging Getty Images to either sell itself or add Murray to its board of directors.
When these releases failed to significantly impact the stock price, Murray allegedly devised a plan to inflate the stock price by announcing a fake buyout offer for $10 a share, or twice Getty's closing price the prior trading day, causing Getty's stock prices to rise.
SEC termed the offer "false and misleading" and said that Murray and Trillium never had the intention to buy the company and made no genuine effort to fund the proposed transaction. Murray started liquidating his Getty stock immediately after the announcement, without waiting for Getty's response, it said.
"Murray claimed that his buyout proposal could create real value for Getty shareholders," said Mark Cave, Associate Director in the SEC's Division of Enforcement, in a statement. "But we allege that, in the end, Murray leveraged his professional credentials to orchestrate an old-fashioned pump-and-dump scheme, disguised as shareholder activism."
Why It Matters: To resolve SEC's charges of violating antifraud provisions, Murray and Trillium have agreed to a judgment that permanently prohibits them from future violations of certain federal securities laws, bars Murray from serving as an officer or director of a public company, and restricts them from participating in certain securities-related conduct.
The SEC's charges against Murray and Trillium come together with the U.S. Attorney's Office for the District of Massachusetts announcing criminal charges against Murray.
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