February 16, 2023

NY federal court sentences IT professional to 28 months in prison for role in insider trading scheme

On February 15, 2023, the US Department of Justice announced that David Lee Stone, an Idaho IT professional, was sentenced to 28 months in prison for engaging in an insider trading scheme after he pleaded guilty to one count of securities fraud.

In November 2022, the DOJ and Securities and Exchange Commission charged Stone with insider trading for illegally purchasing securities based on pre-released stock tips from investment-advice company The Motley Fool LLC before the tips could be published to the company’s subscribers. Between 2020 and 2022, Stone began obtaining the stock tips using log-in credentials that he fraudulently and deceptively obtained and was not authorized to use. Authorities alleged that Stone realized gains of at least $4.8 million from the scheme and, in 2021, began sharing the stolen tips with another person who allegedly generated profits of approximately $2.7 million.

In addition to the prison sentence, Stone received 3 years of supervised release, must forfeit more than $2.8 million and hundreds of shares of stock, pay $344,000 to the advisor whose credentials were misappropriated, and pay a $20,000 fine.

DOJ Press Release  | Judgment| Final Order of Forfeiture | Information