In the dark web, MillionaireMike was a busy guy.
As far back as 2016, the account with the monk bought names, addresses, dates of birth and social security numbers on the underground markets visiting illegal online goods. He took the personal information to open bank accounts in the names of unconscious strangers, and used the accounts to trade based on inside information he received from others. He eventually sold alleged inside information himself – to a secret FBI agent.
MillionaireMike is James Roland Jones, a 33-year-old SpaceX engineer who pleaded guilty to conspiracy to commit security fraud. A criminal complaint by the Justice Department sets out a series of investments that Jones made in the spring of 2017, mostly through an unnamed conspirator’s account, based on false insider information carried through the shelter. That summer would change the relationship: Jones told the secret agent on July 25 what the earnings of an unnamed company would be and invested $ 5,000 on his behalf. Two days later the numbers came out. They were identical.
The scheme set out by the DOJ is not particularly unusual. But a complaint filed by the Securities and Exchange Commission on Thursday delves much deeper into Jones’ alleged activity – and this is the first time the regulator has turned his attention to the dark web.
The SEC paints Jones less as a smart insider trader than a fraudster, who allegedly gives fraudulent insider tips based on premonitions rather than real insight. It claims that Jones first entered the world of dark internet insider trading at the end of 2016, when he found a wiki listing various hidden markets. One of them advertises itself as ‘the community for the exchange of insider information about the (sic) publicly traded companies’, a description similar to that of a so-called onion website called How to Beat Wall Street.
The price of access to the forum was real insider information. Instead of providing it, Jones allegedly tried to guess what future earnings reports would contain, to give the appearance of insight. He was wrong, and then wrong again, and he was finally right in the third attempt, the SEC says. He was in.
But not for long. How to Beat Wall Street did not hand out lifelong membership; You had to continue to prove your worth if you wanted to exchange tips. Jones could not. The complaint says within three months, moderators had revoked his membership. According to the SEC, although Jones claims he did not get any useful information from the group, it caused a revelation: there was a market for inside tips, but most people could not get into exclusive forums on the dark web not. MillionaireMike can fill that gap.
According to the complaint, Jones started selling ‘insider tips’ in the spring of 2017. “His tips were merely guesswork based on Jones’ own research and speculation,” the SEC claims, and they were generally basic: a stock would go up, or it would go down. Jones allegedly sold tips for the same stock in both directions and offered the following fee for free if it did not work out, as long as they provided a nice review on the dark website on which they did business. The SEC claims that Jones took $ 27,000 in bitcoin from eager investors during the course of the scheme. Jones’ attorney did not respond to a request for comment.
Although the case is the first charges of security fraud on the dark web, the contours are otherwise inconspicuous. The agency pursues dozens of cases of insider trading annually, though the numbers have dropped dramatically among the Trump administrations. “He made up something and convinced others to trade in exchange for bitcoin,” said Urska Velikonja, an expert in security regulation and enforcement at the Georgetown University Law Center. “I see this as a breach of the mill, not as a change in the SEC’s enforcement direction.”