SpaceX headquarters in Los Angeles, California.
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A SpaceX engineer pleaded guilty to a position in the Department of Justice’s privileged trade, the agency announced Thursday, after using information obtained on the dark web to trade public securities with non-public information.
The DOJ criminal case against James Roland Jones, of Hermosa Beach, California, came after an FBI investigation in 2017.
The government’s announcement of the claims agreement identified Jones as a SpaceX engineer, though the agency did not specify whether he currently works for the space company and whether he did so at the time of the fraud.
The Securities and Exchange Commission simultaneously accused Jones of “perpetrating a fraudulent scheme to sell what he called“ privileged advice. ”The SEC did not name SpaceX in its complaint.
SpaceX, the DOJ, and the SEC did not immediately respond to CNBC’s requests for comment.
The DOJ said Jones used the nickname “MillionaireMike” to buy information (such as addresses, dates of birth and social security numbers) on the dark network. The dark web, as defined by the SEC, “refers to anything on the Internet that is not indexed or accessible by a search engine like Google.”
Jones used this information to conduct financial transactions on non-public material information, the DOJ alleges. In April 2017, an undercover FBI agency gave Jones “alleged inside information related to a listed company,” the DOJ said.
“From April 18, 2017, to May 4, 2017, Jones and a conspirator conducted numerous securities transactions based on this alleged insider information,” the DOJ said.
The SEC charged Jones with anti-fraud violations of federal securities law. Jones accepted a forked deal with the SEC and faces a maximum sentence of five years in federal prison at his request with the DOJ.
“This case demonstrates that the SEC can and will prosecute violators of securities law wherever they operate, even in the dark web,” Fort Worth Regional Office Director SEC said in a statement Peavler.