SpaceX headquarters in Los Angeles, California.
AaronP / Bauer-Griffin | GC images | Getty Images
A SpaceX engineer pleaded guilty to insider trading before a Justice Department, the agency said on Thursday, after using information obtained on the dark web to trade public securities with non-public information.
The DOJ’s criminal case against James Roland Jones of Hermosa Beach, California came after an FBI investigation in 2017.
The government’s announcement of the plea deal identified Jones as a SpaceX engineer, although the agency did not specify whether he currently works for the space company or whether he was doing so at the time of the fraud.
The Securities and Exchange Commission simultaneously accused Jones of “committing a fraudulent scheme to sell what he called” insider tips. ” The SEC did not mention 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 purchase information – such as address, dates of birth, and Social Security numbers – on the dark web. The dark web, as defined by the SEC, “refers to anything on the Internet that is not indexed by or accessible through a search engine such as Google.”
Jones then used this information to conduct financial transactions based on material, non-public information, the DOJ claims. In April 2017, an undercover FBI agency gave Jones “alleged insider information related to a publicly traded” company, the DOJ said.
“From April 18, 2017 to May 4, 2017, Jones and a conspirator executed numerous securities transactions based on this alleged insider information,” the DOJ said.
The SEC charged Jones with anti-fraud violations of federal securities laws. Jones agreed to a split settlement with the SEC, and is facing a maximum sentence of five years in federal prison under his plea to the DOJ.
“This case shows that the SEC can and will prosecute securities violators wherever they operate, even on the dark web,” David Peavler, director of SEC’s regional office, said in a statement.