The Dark Side of Trading: SEC Takes Action
The U.S. Securities and Exchange Commission (SEC) has taken a dramatic step into the shadowy realms of the darknet, announcing charges against one James Roland Jones, a California resident. This unprecedented enforcement action marks the SEC’s debut in tackling securities fraud occurring on hidden online platforms. Talk about getting tangled in the web!
How it All Went Down
According to the complaint filed on March 18, Jones was allegedly lurking around a darknet insider trading forum back in late 2016, on the hunt for material non-public information (MNPI) to trade securities. Imagine him like a digital pirate, seeking treasure but failing to find anything valuable. Spoiler alert: he didn’t get the goods, but this didn’t stop him from trying to pull off his own scams.
From Seeker to Seller
In the spring of 2017, things took a turn. Instead of being the information seeker, Jones went rogue and began flogging insider stock tips himself. Under the guise of having insider knowledge from that elusive forum and other supposed corporate connections (which seems more like a tall tale than the truth), Jones allegedly pocketed around $27,000 in Bitcoin for his dubious tips.
Double Trouble: The Tipster’s Tricks
Jones became quite the crafty operator, providing ambiguous tips predicting whether stocks would rise or fall. To really spice things up, he often hedged his bets by selling conflicting tips for the same stock to different customers. This is what we call a win-win in the world of scamming! When his tips flopped, he had a little trick up his sleeve: offering free tips in exchange for positive reviews on a darknet marketplace to juice his reputation.
Pyramid Scheme of Plunder
But wait, there’s more! In 2017, Jones took it up a notch by running a collective investment pool, claiming he made trades on behalf of his ‘investors.’ Spoiler alert again: he was not actually trading with their money! Instead, he returned a fraction of their principal as supposed profits, luring them into investing even more. Classic bait-and-switch!
No Crime Goes Unpunished
Jones is not just in hot water; he faces serious allegations of violating the anti-fraud provisions of the Exchange Act. What does that mean? The SEC wants him to cough up the ill-gotten gains plus interest. They’re also pursuing civil penalties and want to ensure he can’t pull any more stunts like this in the future.
SEC’s Stance on Dark Web Crimes
David Peavler, the director of the SEC’s Fort Worth office, reassures us all that the agency isn’t turning a blind eye to crimes committed in the shadows. In his words: “This case shows that the SEC can and will pursue securities law violators wherever they operate, even on the dark web.” Now that’s some dark web justice we can all cheer for!
