SAN FRANCISCO (AP) — Federal authorities announced Friday that a former technology executive has pleaded guilty to one count of fraud in connection with a scheme to artificially inflate the stock price of photo and video sales company Getty Images.
Robert Scott Murray, who served as CEO of network equipment maker 3Com for a few months in 2006, was indicted on securities fraud charges for allegedly trying to manipulate the stock price of Seattle-based Getty Co. According to a statement from the Department of Justice, Murray held about 300,000 shares of Getty Images Holdings Inc. as of April 2023, and the investor allegedly tried to drive up the price of Getty Co. shares in order to liquidate his holdings and realize a larger profit.
According to a statement from the SEC, Murray first issued a series of news releases calling on the company to either sell itself or add Murray to its board of directors. Federal authorities say Murray issued the releases through Trillium Capital, a self-described Massachusetts venture capital firm that was sole owner and operator of Trillium Capital.
Then, on April 24, 2023, Trillium announced it would acquire Getty Images outright for $10 per share, nearly double the previous day’s closing price. Although the company’s stock price rose that day, it was still well below $10.
Getty issued its own news release the next day casting doubt on the proposal, calling it an “unsolicited, non-binding and highly conditional proposal” to acquire “an undisclosed number of outstanding shares.” The company said Trillium had not provided Getty’s board of directors with any evidence that the proposal was “sufficiently credible to justify engagement.”
The SEC said the acquisition proposal was “false and misleading” and that Murray and Trillium made no effort to raise the necessary financing for the acquisition. The SEC further noted that “within minutes of the market opening on April 24, Murray began selling his Getty Images shares without waiting for Getty Images to respond to his proposal.” The Department of Justice statement asserted that Murray sold all of his Getty Images shares “in less than an hour, for approximately $1,486,467.”
Murray could not be reached for comment. An email sent to an address on Trillium’s website was returned to The Associated Press, and multiple calls to a phone number listed by Trillium received a busy signal.
The Justice Department said Murray will appear in federal court in Boston at a later date.
