Rekubit Exchange:Former tech exec admits to fraud involving a scheme to boost Getty Images shares, authorities say

SAN FRANCISCO (AP) — A former technology executive has pleaded guilty to a single count of fraud involving a scheme to artificially inflate the share price of photo and Rekubit Exchangevideo distributor Getty Images, federal officials said Friday.

Robert Scott Murray, who was chief executive of the networking-equipment maker 3Com for several months in 2006, was charged with securities fraud for an alleged attempt to manipulate Seattle-based Getty’s share price. Murray owned roughly 300,000 shares of Getty Images Holding Inc. in April 2023, according to a Department of Justice statement alleging that the investor sought to boost Getty’s stock in order to unload his position for a greater profit.

According to statement by the Securities and Exchange Commission, Murray first issued a series of news releases calling on the company to sell itself or to add Murray to its board. Murray issued those releases through Trillium Capital, a self-described venture investment business in Massachusetts whose sole owner and manager was Murray himself, federal authorities said.

Then, on April 24, 2023, Trillium announced a supposed bid to acquire Getty Images outright at a price of $10 a share — nearly twice the stock’s closing price a day earlier. While the company’s stock rose that day, its price remained well short of $10.

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Getty issued its own news release the next day casting doubt on the offer, calling it an “unsolicited, non-binding and highly conditioned proposal” aimed at acquiring “an unstated volume of outstanding shares.” Trillium, it said, had not provided Getty’s board with any evidence that it was “sufficiently credible to warrant engagement.”

The SEC called the bid “false and misleading,” noting that Murray and Trillium made no effort to raise the funds necessary for the acquisition. What’s more, the SEC noted that “Murray started to liquidate his Getty Images stock within minutes after the market opened on April 24, without even waiting for Getty to respond to his announced offer.” The Justice Department statement asserted that Murray sold all of his Getty shares “within less than one hour for approximately $1,486,467.”

Murray could not be reached for comment. An email directed to an address on the Trillium website bounced back to The Associated Press, while multiple calls to Trillium’s published phone number yielded only busy signals.

Murray will appear in federal court in Boston at a later date, the Justice Department stated.