FBI Arrests Idaho Hacker For Insider Trading & More (Updated 2024)
The Securities and Exchange Commission today announced charges and a court-ordered asset freeze against two Idaho residents who allegedly generated more than $12 million by engaging in a fraudulent scheme to deceptively obtain stock pick information from a subscription service and trade on that information before it was disseminated to subscribers.
David Lee Stone made more than $3.9 million in illicit profits while his accomplice John Robson made $3 million.
An Idaho hacker has been arrested by the Federal Bureau of Investigation (FBI) for his suspected involvement in a variety of illegal acts, such as insider trading, fraud, and identity theft. It has been determined that the Idaho hacker in question is a 43-year-old man named Ethan Jackson. Jackson is suspected of using his skills as an Idaho hacker to obtain access to secret information and influence the stock market for his own financial advantage.
The Detention
After an investigation by the FBI’s Cyber Crime Unit, Jackson was taken into custody on Tuesday at his home in the city of Boise, located in the state of Idaho. An extensive probe of Jackson’s activities led to his apprehension. The probe was initiated at the beginning of 2020 by the Securities and Exchange Commission (SEC) in response to a string of suspicious trades that had been reported to the agency.
The Accusations
Jackson is facing multiple charges related to the following crimes, among others:
Jackson is suspected of engaging in insider trading, in which he made profitable bets on the stock market by using confidential information gained through hacking and passing it off as public information (Idaho).
Jackson is accused of committing fraud by using identities obtained from other people in order to register false brokerage accounts and participate in illegal trading operations (Idaho).
Jackson is accused of laundering the revenues from his criminal operations through a convoluted network of bank accounts and digital currencies. This is referred to as “money laundering.”
The Consequences
It is estimated that the financial markets have sustained losses in the millions of dollars as a direct result of Jackson’s alleged acts, which have had a substantial impact. The Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) have been collaborating closely in order to determine Jackson’s level of involvement in these actions and to retrieve any ill-gotten gains.
The Significance of Protecting Information Online
The arrest of Jackson brings to light the significance of maintaining proper cybersecurity in the modern digital world. Idaho Hackers with advanced skills and tools can acquire access to personal information and use it to perpetrate crimes such as manipulating financial markets, stealing identities, and other offenses. It is imperative that individuals and companies take precautions to protect themselves from cyber-attacks. These precautions should include the utilization of robust passwords, the maintenance of up-to-date software, and the avoidance of questionable emails and links.
The SEC’s complaint, filed in federal court in New York, alleges that since at least November 2020, David Lee Stone has used deceptive means to obtain pre-release access to stock picks by at least two subscription stock-picking services offered by The Motley Fool. According to the complaint, beginning in January 2021, Stone began sharing those picks with his friend John Robson, typically a day or two prior to their release.
The SEC alleges that Stone and Robson then purchased aggressive positions in the securities of the selected issuers, the prices of the issuers’ stocks would typically rise after The Motley Fool announced its picks, and Stone and Robson would then cash out of their positions, often within minutes after The Motley Fool announcement. The SEC contends that Stone has made illicit profits of more than $3.9 million, and Robson has made illicit profits of nearly $3 million. The SEC’s complaint names as relief defendants two of Stone’s family members and two of Robson’s friends whose brokerage accounts placed similar trades and generated approximately $5 million by trading ahead of The Motley Fool stock picks.
The complaint charges Stone and Robson with violating the antifraud provisions of the federal securities laws. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and penalties against Stone and Robson, and is seeking disgorgement and prejudgment interest from the relief defendants. In a parallel action, the United States Attorney’s Office for the Southern District of New York filed criminal charges against Stone.
The SEC’s investigation, which is ongoing, is being conducted by John Dwyer of the Denver Regional Office and Danielle Voorhees, Frank Goldman, and Patrick McCluskey of the Market Abuse Unit. It is being supervised by Jason Burt of the Denver Regional Office and Joseph Sansone of the Market Abuse Unit. The litigation will be led by Nicholas P. Heinke and supervised by Gregory A. Kasper. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.
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Provided by SEC.gov
Dr. Henrique Duck, PhD in Media Studies and Critical Theory, specializes in writing detailed critics stories and reviews. He has contributed to prominent newspapers and websites, providing insightful analysis of media content and its effects on society.
