By Nate Raymond
BOSTON (Reuters) – A former CEO of several publicly traded companies was sentenced on Tuesday to 10 months in prison after admitting he launched a fake $4 billion takeover bid for Getty Images Holdings to artificially inflate the visual media company’s stock price.
Scott Murray, who previously served as chief executive of Stream Global Services and 3Com, was sentenced by U.S. District Judge Denise Casper in Boston after pleading guilty in June to committing securities fraud.
Prosecutors sought a 16-month prison term for Murray, a long-time investor and businessman who in 2007 launched Trillium Capital to invest his own money in other companies.
Prosecutors said the fraud began after Murray, 61, bought about 300,000 shares of Seattle-based Getty, which competes with Reuters and the Associated Press in providing photos and videos for editorial use.
After building a position in Getty, Murray and Trillium in early April 2023 began issuing press releases and sending emails pushing Getty to sell itself or add him to its board of directors, prosecutors said. Getty rejected those proposals.
Losing money on his investment, Murray then sought to mitigate his losses by issuing a press release announcing the bogus $4 billion takeover bid of Getty by Trillium, which had only $20 on hand, prosecutors said.
The April 24, 2023 announcement drove up Getty’s stock price, allowing Murray to sell his entire remaining stake in Getty of about 209,250 shares within two hours for about $1.49 million, prosecutors said.
The fake takeover bid generated substantial news coverage. Murray at the time declined in an interview with Reuters to say how he would fund a takeover but said his bid was genuine and that his “deep relationships” in the private equity industry made it possible.
“He offers no excuses for that conduct beyond the fact that he simply panicked and compounded his initial poor choices,” Murray’s lawyers wrote in court papers.
In addition to serving time in prison, Murray must also forfeit $227,543.