SEC charges eight 'social media influencers' with securities fraud
Alleged perps allegedly used social media to "manipulate exchange-traded stocks."
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The Securities and Exchange Commission on Wednesday announced charges against eight "social media influencers" in what the agency said was a coordinated effort to manipulate stocks via multiple Internet platforms.
The agency said in a press release those charged where involved in a $100 million securities fraud scheme in which they used the social media platforms Twitter and Discord to "manipulate exchange-traded stocks."
The SEC also said seven of them "promoted themselves as successful traders and cultivated hundreds of thousands of followers on Twitter and in stock trading chatrooms on Discord," after which they purchased certain stocks, then "encouraged their substantial social media following to buy those selected stocks by posting price targets or indicating they were buying, holding, or adding to their stock positions."
Following a jump in targeted stock prices, the SEC claims, the influencers "regularly sold their shares without ever having disclosed their plans to dump the securities while they were promoting them."
The eighth person named lives in Texas and is charged with "aiding and abetting the alleged scheme."
The seven named individuals are Perry Matlock, Edward Constantin, Mitchell Hennessey, Stefan Hrvatin, John Rybarcyzk, Gary Deel and Thomas Cooperman; the eighth named man from Texas is Daniel Knight.
"As our complaint states, the defendants used social media to amass a large following of novice investors and then took advantage of their followers by repeatedly feeding them a steady diet of misinformation, which resulted in fraudulent profits of approximately $100 million," SEC investigator Joseph Sansone said in the press release.
"Today’s action exposes the true motivation of these alleged fraudsters and serves as another warning that investors should be wary of unsolicited advice they encounter online," he added.
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