There was the financial adviser who sold Facebook shares he didn’t own. Now there’s the middleman who tried to buy and sell more than $1 billion worth of Facebook shares from jail.
Troy Stratos, a failed music producer and just generally creative guy when it comes to getting money, was trying to broker a deal to buy pre-IPO Facebook shares for a Pennsylvania wealth management company when he landed in jail on unrelated charges. (Unrelated, as in allegedly stealing $7 million from Eddie Murphy’s ex-wife.) That didn’t stop Mr. Stratos, who’d been paid half of his $22 million fee up front, from trying to complete the deal. According to BloombergBusinessweek:
“I had intimate contacts that were Facebook shareholders, and I had an opportunity with legitimate Facebook buyers to put them together,” Stratos said in the hearing. The arrest, he said, complicated the deal by making him look like some “wild con man,” he said.
Ever determined, he worked at acquiring 40 million shares from company insiders by dictating text messages from jail under an assumed name. At the time of his arrest in late 2011, Facebook was trading at average prices of more than $30 a share in private transactions.
Meanwhile, Mr. Stratos told a grand jury investigating the failed transactions that he didn’t return the $11 million he was paid, spending the cash paying off old debts, investing in a Vegas restaurant and lavishing on luxury cars.
Then again, Facebook shares have plummeted since the company’s May IPO, falling from an offering price of $38 to as low as $17.73 in early September. Even after rising 12.6 percent today, the stock has fallen far from the price Mr. Stratos’ client would have paid. Maybe he deserves a bonus for that.