The United States Securities and Exchange Commission (SEC ) has charged eight Twitter influencers for using social media platforms Twitter and Discord to manipulate exchange-traded stocks. The securities regulator charged the men before the US District Court for the Southern District of Texas, it announced on Wednesday.
SEC Takes Aim at Twitter Influencers Using Pump-and-Dump Scheme
According to a press release, the SEC charged influencers Perry Matlock, Edward Constantin, Thomas Cooperman, Gary Deel, Mitchell Hennessey, Stefan Hrvation and John Rybarcyzk of allegedly purchasing certain stocks, encouraged their followers to do the same and then secretly dumped them to make profits when the share prices or trading volumes rose.
The Commission charged the last influencer, Daniel Knight, of aiding and abetting the other influencers in the pump-and-dump scheme “by, among other things, co-hosting a podcast in which he promoted many of the other individuals as expert traders" and provided them “with a forum for their manipulative statements.”
“Knight also traded in concert with the other defendants and regularly generated profits from the manipulation,” the watchdog added.
SEC Charges ‘Season Stock Manipulators’
In a court filing on the matter seen by Finance Magnates, the SEC described the influencers as "seasoned stock manipulators" who have for years been parading themselves as "trustworthy stock-picking gurus."
"They [the influencers] identify stocks ripe for manipulation, acquire substantial positions in these securities, and then recommend those stocks as good investments to their followers on Twitter, in online stock-trading forums they run, and on podcasts,” SEC explained.
“They [the influencers] encourage their followers to purchase the selected stocks, often claiming that they likewise have bought or intend to buy these stocks for themselves and hold them. Instead, the defendants sell their shares into the demand that their deceptive promotions generate,” the regulator further explained.
Meanwhile, the SEC noted that the Department of Justice’s Fraud Section and the US Attorney’s Office for the Southern District of Texas have also brought criminal charges against all the influencers in a separate action.
