SEC Obtains Final Judgment Against Second Defendant in Fitbit Stock Manipulation Scheme
Litigation Release No. 24557 / August 12, 2019
Securities and Exchange Commission v. Mark E. Burns, No. 1:18-cv-06257 (S.D.N.Y. filed July 11, 2018)
On August 5, 2019, the U.S. District Court for the Southern District of New York entered a final judgment against Mark E. Burns for his participation in a scheme to manipulate the price of Fitbit, Inc. securities through false regulatory filings.
The SEC's Complaint, filed on July 11, 2018, alleged that on November 9, 2016, Burns purchased Fitbit call options just minutes before he and his co-conspirator, Robert W. Murray, filed a fake tender offer on the SEC's EDGAR system purporting to offer to acquire Fitbit's shares at a substantial premium. Fitbit's stock price temporarily spiked when the tender offer became publicly available on November 10, 2016, and Burns sold all of his options for a profit of approximately $13,000.
Without admitting or denying the allegations of the Complaint, Burns has consented to the entry of a judgment permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and the tender offer provisions of Section 14(e) of the Exchange Act and Rule 14e-8 thereunder. The judgment also orders Burns to pay $13,886 in disgorgement and prejudgment interest, and a civil penalty of $60,000.
The SEC previously charged Murray for his role in the same scheme, and Murray settled with the SEC. Murray also was sentenced to prison in a parallel criminal case.
The SEC's investigation was conducted by David W. Snyder and Assunta Vivolo of the Cyber Unit, with the assistance of Patrick A. McCluskey of the Market Abuse Unit. The case was supervised by Robert A. Cohen, Kelly L. Gibson, and Joseph G. Sansone. The litigation was led by Julia C. Green of the Philadelphia Regional Office and supervised by Jennifer C. Barry.