US charges 8 in social media ‘pump-and-dump’ stock scheme

Dec 13, 2022, 9:30 PM | Updated: Dec 15, 2022, 12:22 am
FILE - The U.S. Securities and Exchange Commission building in Washington is pictured on Aug. 5, 20...

FILE - The U.S. Securities and Exchange Commission building in Washington is pictured on Aug. 5, 2017. The government on Wednesday, Dec. 14, 2022, charged eight men of earning more than $100 million in stock market profits by manipulating their novice-investor followers on social media. The Department of Justice and the Securities and Exchange Commission said that from early 2020 to around April of this year the men, who had combined following of over 1.5 million on Twitter, ran a “pump-and-dump” scheme. (AP Andrew Harnik, File)

(AP Andrew Harnik, File)

WASHINGTON (AP) — The government on Wednesday charged eight men of earning more than $100 million in illicit stock market profits by manipulating their novice-investor followers on social media.

The Justice Department and the Securities and Exchange Commission said that from early 2020 to around April of this year the men, who had combined following of over 1.5 million on Twitter, ran a “pump-and-dump” scheme.

Seven of the social-media influencers promoted themselves as successful traders on Twitter and in Discord chat rooms and encouraged their followers to buy certain stocks, the SEC said. When prices or volumes of the promoted stocks would rise, the influencers “regularly sold their shares without ever having disclosed their plans to dump the securities while they were promoting them,” the agency said.

“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,” said the SEC’s Joseph Sansone, chief of the SEC Enforcement Division’s Market Abuse Unit.

Named in the SEC’s complaint were Perry Matlock (@PJ_Matlock), John Rybarcyzk (@Ultra_Calls) and Edward Constantin (@MrZackMorris) of Texas; Thomas Cooperman (@ohheytommy) and Gary Deel (@notoriousalerts) of California; Mitchell Hennessey (@Hugh_Henne) of New Jersey; and Stefan Hrvatin (@LadeBackk) of Florida.

An eighth person, Daniel Knight (@DipDeity) of Texas, co-hosted a podcast promoting the defendants as experts and traded in concert with them.

The Justice Department said the defendants showcased their “extravagant lifestyles” to fool others into thinking they were skilled stock traders.

If convicted, each faces a maximum penalty of 25 years in prison for conspiracy to commit securities fraud and each charged count of securities fraud, the department said. Constantin also faces a maximum penalty of 10 years in prison if convicted of engaging in unlawful monetary transactions.

The SEC is increasingly cracking down on social media influencers and celebrities who promote financial products, including cryptocurrency.

In October, the SEC barred Kim Kardashian from promoting cryptocurrencies for three years and fined her $1 million to settle federal charges that she recommended a crypto security to her 330 million Instagram followers without making clear that she was paid to do so.

In 2020, actor Steven Seagal agreed to pay more than $300,000 as part of a similar settlement with the SEC, which also banned him from promoting investments for three years.

In 2018, the SEC settled charges against professional boxer Floyd Mayweather Jr. and music producer DJ Khaled for failing to disclose payments they received for promoting investments in a digital currency.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Indonesian security forces search for NZ pilot taken hostage

JAYAPURA, Indonesia (AP) — Indonesian security forces searched Wednesday for a pilot from New Zealand who was taken hostage by separatist rebels in restive Papua province. The joint team of soldiers and police searching for the pilot, Philip Mark Mehrtens, also managed Wednesday to rescue 15 construction workers who had been building a health center […]
1 day ago
FILE - Police cordon off the area outside the Turkish embassy in Stockholm, Sweden, on Jan. 21, 202...
Associated Press

Sweden: Anti-Turkish protests have increased attack threat

STOCKHOLM (AP) — The Swedish domestic security agency warned Wednesday that the threat of attacks in the Scandinavian country has increased in the weeks since a far-right activist burned a Quran outside the Turkish Embassy in Stockholm. The agency noted that international reactions to the events outside the embassy last month” have been extensive” and […]
1 day ago
President Joe Biden and his son, Hunter Biden, step off Air Force One, Saturday, Feb. 4, 2023, at H...
Associated Press

Ex-Twitter execs to face GOP questioning on Hunter Biden

WASHINGTON (AP) — House Republicans are expected to question former Twitter executives about the platform’s handling of reporting on Hunter Biden, the president’s son, fulfilling a party promise to investigate what they have long asserted is anti-conservative bias at social media companies. Three former executives will be appearing Wednesday before the House Oversight and Accountability […]
1 day ago
Associated Press

Uganda blocks operations of UN rights office in the country

KAMPALA, Uganda (AP) — Ugandan authorities say they will not renew the mandate of the United Nations human rights office in the East African country, effectively blocking the group’s operations at a time of heightened concerns over rights abuses. In a Feb. 3 notice to the Office of the U.N. High Commissioner for Human Rights […]
1 day ago
FILE - Designer Stella Jean accepts applause at the end of her womens Spring/Summer 2018/19 fashion...
Associated Press

Stella Jean quits Milan Fashion Week over lack of inclusion

MILAN (AP) — The only Black designer belonging to Italy’s fashion council is withdrawing from this month’s Milan Fashion Week citing a lack of commitment to diversity and inclusion, and on Wednesday announced a hunger strike out of concern that other minority designers associated with her will suffer a backlash. Stella Jean told The Associated […]
1 day ago
President Joe Biden talks with Vice President Kamala Harris after the State of the Union address to...
Associated Press

Biden makes Wisconsin his 1st stop after State of the Union

WASHINGTON (AP) — President Joe Biden on Wednesday was headed to Wisconsin, a battleground state he won by the slimmest of margins in 2020, to press his economic message and other themes from his State of the Union address in the window before his next big speech: announcing a possible reelection bid. Biden was set […]
1 day ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
US charges 8 in social media ‘pump-and-dump’ stock scheme