Man Accused in Emulex Hoax Is Released on Bail

A 23-year-old El Segundo student accused of sabotaging an Orange County company’s stock by issuing a phony press release was freed Friday from a federal jail on $100,000 bail.

Mark Simeon Jakob, an El Camino Community College student, is accused of a hoax that drove down the stock price of Costa Mesa-based Emulex Corp. by 62%.

Authorities estimate investors lost about $50 million collectively because of the false news release that was picked up by a major financial wire service and others. Jakob faces trial on charges of securities and wire fraud.

The false, Aug. 25 release stated that the chief executive of Emulex had quit and the company was restating its quarterly earnings from a profit to a loss.

Authorities say Jakob sent the release because he faced a huge loss from short-selling stock in Emulex, which makes high-tech fiber optic equipment. A short sale involves selling borrowed shares of a stock that the trader does not own in anticipation that the price will decline.

When the stock fell, authorities say, Jakob bought back what he sold short, then resold it days later after the price had recovered. In all, they say, he made more than $241,000 in profits.

Jakob was released on bail and faces as much as 15 years in prison if convicted, a spokesman said.