An Alabama man was sentenced today to 14 months in prison and three years of supervised release for his role in the unauthorized hijacking of the account of the U.S. Securities and Exchange Commission (SEC) on social media platform X, or previously Twitter.
Eric Council Jr., 26, of Huntsville, pleaded guilty to conspiracy to commit aggravated identity theft and access device fraud in February. According to court documents, Council conspired with others to gain control of the SEC’s X account and falsely report that the SEC had approved Bitcoin (BTC) Exchange Traded Funds (ETFs), a highly anticipated move by the market. Within minutes of the fake report, the price of BTC rose more than $1,000 per BTC. After the correction, the price of BTC fell more than $2,000 per BTC.
The conspirators took control of the SEC’s X account with an unauthorized Subscriber Identity Module (SIM) swap conducted by Council. A SIM swap is a form of sophisticated fraud in which a criminal perpetrator fraudulently causes a cellular telephone carrier to transfer a cellular telephone number from a victim’s SIM card to a SIM card under the perpetrator’s control, so that the perpetrator can gain access to a victim’s social media or virtual currency accounts. In furtherance of the scheme, Council used an identification card printer to create a counterfeit identification card with a victim’s personally identifiable information that was compiled from co-conspirators.
Council used the identification card to impersonate the victim and gain access to the victim’s phone number in order to gain access to the SEC’s X account. Council’s co-conspirators then went forward and posted on the SEC Chairman’s behalf falsely claiming the BTC ETF approval. Council was compensated in BTC by co-conspirators for his services.
“Council and his co-conspirators employed advanced cyber technology to hack into the SEC’s X account and placed a fictitious notice that manipulated core financial markets,” stated Matthew R. Galeotti, Chief of the Criminal Division at the Justice Department. “It is important to prosecute those who would profit at the expense of undermining the integrity of digital assets through fraud. The Department of Justice is committed to bringing to justice those who commit cyber fraud and exploit investors.”
“These are kinds of scams that pose a threat to the soundness and health of our market system,” District of Columbia U.S. Attorney Jeanine Pirro said. “SIM swap scams are the risk of financial loss to unsuspecting citizens, financial institutions, and government agencies. Don’t think you can’t get caught. You will be caught, you will be prosecuted, and you will be punished for the damage your behavior inflicts.”
“The intentional hijacking of a federal agency’s official communications system was a deliberate criminal act meant to deceive the public and affect financial markets,” said FBI Criminal Investigative Division Acting Assistant Director Darren Cox. “By spreading false information to affect the markets, Council attempted to erode public trust and manipulate the financial system. Today’s sentencing clearly indicates that anyone who uses public forums for criminal purposes will be held accountable.”
SEC OIG commitment to holding wrongdoers accountable and maintaining the integrity of SEC programs and operations through vigorous oversight of investigations is reflected in today’s sentencing, said Securities and Exchange Commission Office of Inspector General Special Agent in Charge Amanda James. “We are committed to working with the SEC and our law enforcement partners to help the SEC conduct its valuable work in a timely and effective manner.”.
The case was conducted by FBI Washington Field Office and SEC Office of Inspector General. Computer Crime and Intellectual Property Section Trial Attorney Ashley Pungello of the Criminal Division, Fraud Section Trial Attorney Lauren Archer of the Criminal Division, and Assistant U.S. Attorney Kevin Rosenberg for the District of Columbia are handling the prosecution. Cyber Fellow Paul M. Zebb III provided valuable assistance.