A Scotts Valley man pleaded guilty last week in connection with a scheme to defraud investors in a publicly traded company’s securities and manipulate the company’s stock price.

According to court documents cited by the U.S. Attorney’s Office in the Northern District of California, Jason Nielsen, 48, of Scotts Valley, was a large shareholder of Arrayit, a publicly traded medical device company based in California.

From approximately 2019 through April 2020, Nielsen said in a June 9 plea that he engaged in an unlawful “scalping” and “spoofing” scheme to manipulate the price of Arrayit securities, according to his plea.

Nielsen used online message boards to publicly post false and misleading information about the nature of his trading in Arrayit securities, in order to induce others to purchase Arrayit securities and thereby drive up the stock’s price, a practice known as “scalping.”

Nielsen admitted that he placed orders to buy Arrayit stock that he intended to cancel before execution. The purpose of these orders was to deceive the

Prosecutors said this allowed Nielsen to sell his shares at artificially inflated prices, a practice known as “spoofing.” While engaged in these practices, Nielsen was secretly selling his own previously acquired shares at an artificially inflated price.

Nielsen pleaded guilty to one count of securities fraud. He is scheduled to be sentenced in October and faces a maximum penalty of five years in prison.