Seven social media influencers have been charged in an extensive stock scheme that brought in millions of dollars.
According to the Securities and Exchange Commission, at least seven people with massive social media followings are accused of using Twitter and Discord to promote themselves as “successful traders” and recruiting hundreds of amateur investors to invest in stocks they’d also purchased. However, they never informed their followers that they were planning to sell shares once costs or trading volumes increased. Through this inflation process, the influencers made a combined $100 million.
The scheme goes back to at least 2020, which would have been an attractive way for people out of work to make some extra cash during the COVID-19 pandemic. Sadly, the Department of Justice says the group was feeding their followers misinformation about trading, which caused many to lose money.
Those charged so far are Thomas Cooperman, Gary Deel, Mitchell Hennessey, Stefan Hrvatin, John Rybarczyk, and Edward Constantinescu, also known as Edward Constantin, who goes by @MrZackMorris on Twitter. He is a known figure on the timeline, sporting 549,000 followers, and is often retweeted for his stock advice. Yet, many of those incriminating tweets have been deleted from his accounts. The influencers have all taken measures to put disclaimers on their social media profiles that state they are not professional financial advisors.
Daniel Knight has also been charged by the SEC with aiding and abetting the group, with an additional charge of conspiracy by the DOJ. Prosecutors allege he co-hosted a podcast publicizing many of his pals as expert traders. Knight also traded with the other defendants under the scheme.
Joseph Sansone, chief of the SEC enforcement division’s market abuse unit, said investors should be careful about receiving economic and trading advice online.
Each of the defendants has been hit with charges of securities fraud.
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