That’s the SEC’s first enforcement action involving alleged securities violations on the Dark Net
On March 18th, the Securities and Exchange Commission charged James Roland Jones of Redondo Beach, California, with perpetrating a fraudulent scheme to sell what he called “insider tips” on the Dark Net.
According to information, in late 2016 and 2017, Jones accessed various Dark Net marketplaces, including a website claiming to be an insider trading forum, in search of material, nonpublic information to use for his own securities trading.
The complaint states that in order to gain access to the insider trading forum, Jones lied about possessing material, nonpublic information.
By doing so, Jones allegedly gained access to the insider trading forum for a short period but was unsuccessful in obtaining valuable material and nonpublic information.
The complaint further alleges that Jones subsequently devised a scheme to sell purported insider tips to others on the Dark Net.
The SEC alleges that, in the spring of 2017, Jones offered and sold on one of the Dark Net marketplaces various purported “insider tips” that he falsely described as material, nonpublic information from the insider trading forum or corporate insiders.
According to the complaint, several users paying in Bitcoin purchased these tips and ultimately traded based on the information Jones provided.
The SEC’s complaint charged Jones with violating the antifraud provisions of the federal securities laws.
Simultaneous with the filing, Jones agreed to a bifurcated settlement. This way, subject to court approval, permanently enjoins him from further violating these provisions and reserves the determination of disgorgement and civil penalties for a later date.
We’ve reported that the world’s largest illegal Dark Net marketplace taken down.