By Jonathan Stempel
(Reuters) - A Massachusetts man agreed to plead guilty to securities fraud for artificially inflating the stock price of Getty Images Holdings, including through a bogus $4 billion takeover bid for the visual media company, authorities said on Friday.
The U.S. Department of Justice said Scott Murray, 60, of Mashpee, owned about 300,000 Getty shares in April 2023 when he began a purported activist campaign for Getty to sell itself or add him to its board of directors.
Then on April 24, Murray's company Trillium Capital issued a press release announcing a non-binding proposal to buy Getty for $10 per share, nearly twice its prior $5.06 close.
Prosecutors called the release "materially false and misleading in that Murray had no intention of acquiring Getty and no ability to do so," and said Murray issued it so he and a friend could sell their shares at higher prices.
Murray allegedly sold the 209,250 Getty shares he still owned within two hours after issuing the press release, for an average $7.10 per share.
In an interview with Reuters at the time, Murray declined to say how he would fund a takeover, but said his "deep relationships" in the private equity industry made it possible.
Murray had been chief executive of multiple public companies including electronics manufacturer 3Com and information technology services outsourcer Stream Global Services.
A lawyer for Murray did not immediately respond to requests for comment.
Murray faces a maximum 20 years in prison, but could receive about two years under his plea agreement.
He also settled related U.S. Securities and Exchange Commission civil charges on Friday, accepting a ban on serving as an officer or director of public companies.
"In the end, Murray leveraged his professional credentials to orchestrate an old-fashioned pump-and-dump scheme, disguised as shareholder activism," said Mark Cave, an associate director in the SEC enforcement division.
Founded in 1995 by Mark Getty and Jonathan Klein, Seattle-based Getty Images competes with Reuters and the Associated Press in providing photos and videos for editorial use.