The U.S. Security and Exchange Commission (SEC) filed a complaint on Thursday in the U.S. District Court for the Southern District of New York. According to the agency, XBOX's audio chat was used to share insider trading of securities. 

The SEC charged Viggiano, Salamone, Forlano, and Bleckley with violating the antifraud provisions of the federal securities law. According to the agency’s press release, Viggiano, in connection with his work at two financial institutions, learned about “impending merger and acquisition transactions and strategic partnerships before they were publicly announced.” 

The former analyst, Anthony Viggiano, allegedly gained access to eight of such transactions and shared them with his friend, Salmone. Salmone used six of the insider information to trade in advance and earn up to $322,000. However, the profit was shared with Viggiano because his company prohibited him from using the information to trade. 

Viggiano tipped Forlano with at least four of the transactions as well, and he made up to $113,000 from three transactions. Further, Forlano gave the insider information to other individuals, including his close friend, Bleckley. Forlano’s college friend Bleckley traded with two transactions and earned approximately $25,000. 

According to page 23 of the report Forlano gave the insider information about the transaction to Bleckley through an XBOX audio chat, with the understanding that the information came from Viggiano. Using the XBOX audio chat, Forlano gave Bleckley insider trading knowledge about ECOM’s stock. 

“On or before August 31, 2022, Forlano instructed Bleckley to use XBOX audio chat to communicate. Using the XBOX audio chat, Forlano told Bleckley that ECOM would get acquired soon, including telling Bleckley an expected purchase price per share. Bleckley understood that the ECOM material nonpublic information he received from Forlano came from Viggiano,” the report read. 

In a personal statement, the Chief of SEC’s Market Abuse Unit, Joseph Sansone, stated that Viggiano violated his employers’ trust by leaking the information to his friends for personal gain. 

“As alleged in our complaint, Anthony Viggiano violated his employers’ trust by misusing his access to confidential information to repeatedly and unjustly enrich himself and his friends,” Sansone said. 

In the meantime, there is no information on how the SEC uncovered the Xbox call during the investigation. However, when bad incidents occur, the gaming console can record and share in-game audio with Microsoft.