An Idaho man who allegedly managed to access stock picks by personal finance website Motley Fool before publication and made millions of dollars trading on the information has been charged with securities fraud.
David Stone, 36, was charged Tuesday by federal prosecutors in Manhattan over trades placed between 2020 and 2022. The Securities and Exchange Commission filed a tandem civil complaint against Stone that also named a friend, John D. Robson, as complicit in the scheme. The SEC identified the investment advisory service from which the stock picks were stolen as Motley Fool.
The SEC said Stone made more than $3.9 million using the tactic, and Robson made $3 million. Stone was arrested Monday and will have his first appearance in federal court in Oregon today, federal prosecutors said. Robson, also an Idaho resident, has not been charged in the criminal case.
Defense attorney information for Stone was not immediately available.
In a statement Tuesday afternoon, Motley Fool said it was cooperating with authorities and was “profoundly grateful to the FBI, the SEC, and the U.S. attorney’s office for their dedicated and intelligent actions that assure that the U.S. securities markets are fair for all investors.”
Prosecutors and securities authorities said Stone, a technology professional, gained unauthorized access to Motley Fool’s computer system and viewed the group’s upcoming stock picks before they were announced to paying subscribers. He then traded on them, sometimes using options contracts that paid out only if shares gained within a week.
Among the dozens of recommended companies whose shares Stone and Robson traded based on the hacks were
Authorities said the shares typically rose after Motley Fool announced its picks, and that Stone and Robson would cash out of their positions soon after the release.
(Updates with statement by Motley Fool in fifth paragraph.)
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