David Stone, Securities Fraud, New York 2022

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Insider Trading Scheme Unfolds in New York

David Stone, a 37-year-old I.T. professional from Nampa, Idaho, has pleaded guilty to one count of securities fraud in connection with a brazen insider trading scheme.

According to the allegations, Stone exploited market-moving stock recommendations made by an investment recommendation service, known as Advisor-1, before they were released to paying subscribers. Stone accessed Advisor-1’s computing system using unauthorized log-in credentials and viewed the recommendations before they were announced to subscribers.

By trading on the recommendations before they were announced, Stone was able to obtain significant profits unavailable to other market participants. Across all his brokerage accounts, Stone realized gains of at least $3.5 million.

In addition to his own trading, Stone supplied trading tips to at least one other person, known as Tipee-1, who profited more than $2.7 million from the scheme.

Stone was arrested in May of this year and pleaded guilty before U.S. District Judge Mary Kay Vyskocil. He faces a maximum sentence of 20 years in prison and is scheduled to be sentenced on February 14, 2023.

The case is being handled by the Office’s Securities and Commodities Fraud Task Force, with Assistant United States Attorneys Samuel P. Rothschild and Andrew Thomas in charge of the prosecution.

The U.S. Securities and Exchange Commission has filed a parallel civil action.