Massachusetts resident liquidated his Getty Images stock holdings after sham offer to buy company drove up its stock price
The Securities and Exchange Commission charged Robert Scott Murray and Trillium Capital LLC, a private company controlled by Murray, with a fraudulent scheme to manipulate the stock price of Getty Images Holdings Inc. by announcing a phony offer by Trillium to purchase Getty Images. Murray, of Mashpee, Mass., is a former CEO and CFO of several publicly traded companies. Here is a copy of the Complaint https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-66-complaint.pdf
The SEC’s complaint, filed in U.S. District Court for the District of Massachusetts, alleges that, in early April 2023, after building a position in Getty Images stock and options, Murray and Trillium began issuing press releases calling upon Getty Images to sell itself or to add Murray to its board of directors. The complaint alleges that Murray designed these press releases, in part, to increase Getty Images stock price, but the releases failed to have much effect on Getty Images stock. Murray thus allegedly devised what he called his “new plan” to pump up the price of Getty Images stock by announcing a phony buyout offer. On the morning of April 24, 2023, Murray and Trillium Capital issued a press release announcing Trillium’s supposed proposal to buy all outstanding stock of Getty Images for $10 a share, nearly twice the prior trading day’s closing price. The supposed offer caused the company’s stock price to spike. The SEC’s complaint alleges that the buyout announcement was false and misleading because Murray and Trillium had no real intention of acquiring Getty, nor did they make a genuine effort to fund the proposed transaction. Although Murray and Trillium pledged in the press release that they would hold their shares, Murray started to liquidate his Getty Images stock within minutes after the market opened on April 24, without even waiting for Getty to respond to his announced offer.
“Murray claimed that his buyout proposal could create real value for Getty shareholders,” said Mark Cave, Associate Director in the SEC’s Division of Enforcement. “But we allege that, in the end, Murray leveraged his professional credentials to orchestrate an old-fashioned pump-and-dump scheme, disguised as shareholder activism.”
The SEC’s complaint charges Murray and Trillium with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. To resolve the SEC’s charges, Murray and Trillium agreed to the entry of a judgment that permanently enjoins them from future violations of these provisions of the federal securities laws, enjoins them from participating or engaging in certain securities-related conduct, and bars Murray from serving as an officer or director of a public company. Defendants also agreed that the court will determine whether they will be required to pay disgorgement, prejudgment interest, and civil penalties and, if so, in what amounts.
In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts today announced criminal charges against Murray.
- Murray Founded Trillium Capital as an investment management firm, where he serves as the Managing Partner.
- At Trillium Capital, he provided due diligence consulting to private equity firms on deal flow, particularly in tech-enabled services and enterprise software companies.
- He encouraged underperforming CEOs, companies, and boards to improve shareholder value through communication and action plans, such as with Conduent where Carl Icahn is a major shareholder.
- Founded Global BPO Services (a SPAC) and completed a $250 million blank check IPO, which was used to acquire Stream Global Services in 2008 amid the financial crisis. This pioneered the current SPAC structure using a PIPE investment and tender offer.
- Invested in early-stage companies in mobile payments, social media monitoring, SaaS, e-commerce, and real estate through Trillium Capital.
- Managed a broad public stock, bond portfolio, and real estate development investments at Trillium Capital, taking large positions in companies.
- In 2023, Trillium Capital requested that Murray join the board of directors of Getty Images, citing his extensive experience and belief that Getty’s stock should trade above $12 per share.
Jeffrey Newman is a whistleblower lawyer, whose firm represents whistleblowers in healthcare fraud cases under the False Claims Act (FCA) and also under the Securities and Exchange, FINCEN and CFTC whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
