SpaceX Engineer Done Insider Trading on the Dark Web
ON THE DARK Web, MillionaireMike was a busy guy.
Back in 2016, an account with that name was buying names, addresses, birth dates, and social security numbers from underground marketplaces that sell illegal online goods. He used this personal information to open bank accounts in the names of unsuspecting strangers, and used those accounts to transact based on inside information he received from others. In the end, he himself sold the alleged inside information to an FBI secret agent.
Millionaire Mike – James Roland Jones, a 33-year-old SpaceX engineer who has pleaded guilty to conspiring to commit securities fraud. The Justice Department’s criminal lawsuit details a number of investments Jones made in the spring of 2017, mostly through the account of an unnamed conspirator, based on fake inside information provided by the Fed’s secret agency. That summer, the relationship changed dramatically: On July 25, Jones told an undercover agent what the unnamed company’s profits would be, investing $ 5,000 on his behalf. Two days later, the numbers became known. They were identical.
The Securities and Exchange Commission portrays Jones not so much as a savvy insider trader, but as a scammer, ostensibly trading fake insider advice based on conjecture rather than factual data. He claims that Jones first entered the world of insider trading on the darknet in late 2016 when he found a wiki listing various hidden marketplaces. One of them advertised itself as “a community for sharing insider information on (sic) publicly traded companies,” the description of which matches the description of the so-called onion site called “How to Beat Wall Street.”
The forum entry fee was genuine inside information. Instead of providing this, Jones instead allegedly tried to guess what the upcoming earnings reports would contain in order to create the appearance of understanding. He was wrong and then wrong again, and finally, on the third try, he was right, according to the SEC. He was in.
But not to long. How To Beat Wall Street did not have a lifetime membership; you had to keep proving your worth if you wanted to trade advice. Jones couldn’t. The complaint says that within three months, the moderators revoked his membership. The Securities and Exchange Commission claims that while Jones claims to have received no useful information from the group, it sparked a revelation: there was a market for insider advice, but most people couldn’t get to the exclusive forums on the dark web. Millionaire Mike could fill this gap.
The complaint says Jones began selling “insider tips” in the spring of 2017. “His advice was just guesswork, based on Jones’s own research and assumptions,” the SEC says, and in general it was simple: stocks will rise or they will go down. Jones allegedly was selling tips for the same stock in both directions, offering the following advice for free when it didn’t work – provided they left a good review on the dark website they did business on. The SEC claims Jones received $ 27,000 in bitcoin from eager investors throughout the scheme. Jones’ attorney did not respond to a request for comment.
Jones faces up to five years in prison on Justice Department charges of conspiracy. The SEC says he agreed to a “bifurcated settlement” while still awaiting court approval, which requires him to stop committing fraud; further civil penalties will be determined at a later date.