Eight boastful social media influencers who like to pose next to sports cars are being indicted by the US Securities and Exchange Commission (SEC) and Department of Justice (DoJ) who claim they manipulated their 1.5 million followers into making $100 million for themselves to earn. fraudulent gains.”
The suspects, all men in their 20s and 30s, were charged with conspiracy to commit securities fraud in connection with a long-running social media-based “pump and dump” scheme, a recently unsealed indictment by the Texas state grand jury [PDF] and an SEC complaint [PDF] uncovered.
Perry Matlock (38), Edward Constantin (38), Thomas Cooperman (34), Gary Deel (28), Mitchell Hennessey (23), Stefan Hrvatin (35) and John Rybarcyzk (32) are said to have carried out the plan “the acquisition of stocks, promoting the stocks to their followers, and selling the stocks for sizeable profits,” said the DoJ, which claimed they were “assisted and endorsed by Daniel Knight, 23, who co-hosted a popular stock trading Podcast featuring Hennessey that “provided a platform … to deceptively promote the stocks they wanted to sell.”
Constantin, who tweets as @MrZackMorris, is said to have operated Atlas Trading, a stock trading forum, on the social media platform Discord.
The SEC claimed the suspects used Twitter and Discord to manipulate exchange-traded stocks in a $100 million securities fraud scheme, and detailed some rather amusing excerpts from exchanges that allegedly took place between individuals in the group.
The commission claimed the defendants sometimes discussed their plan over Discord voice chats, which they “believed were private but were actually recorded.”
For example, the complaint alleged that on March 1, 2021, Knight and Cooperman discussed the group’s alleged manipulation of the securities of GTT Communications, Inc, then trading on the New York Stock Exchange under ticker GTT.2 .
Below are some excerpts from the complaint:
The SEC alleges that Cooperman, Knight and others were monitoring GTT’s stock price and volume in real-time during this call when an unidentified person exclaimed, “Wow, big bunch!”
Knight then reportedly poked fun at Rybarcyzk’s supporters (whom the SEC claims lost money due to an alleged Rybarcyzk stock dump that caused the stock price to plummet):
The commission alleged in the complaint that the group had “proposed to be trusted stock-picking gurus” to the “FinTwit” community, when in fact they were “expert stock manipulators”.
“FinTwit” is unfortunately not an invented term The registry to mock the stock shock rockers who spread inept jokes, but is more of an established term referring to “the community of Twitter users who regularly tweet about finance and the stock market”. Yes, if you haven’t been on Reddit or Twitter lately and are feeling way too optimistic on a Thursday, then we are there as a society.
The SEC further claimed that the suspects identified stocks “ripe for manipulation,” took significant positions in those securities, and then recommended those stocks as good investments to their followers on Twitter, online stock trading forums, and podcasts. “They encourage their followers to buy the stocks they select, often claiming that they have bought those stocks as well or intend to buy and hold those stocks for themselves. Instead, the defendants are selling their shares into the demand their deceptive promotions are generating.”
The lawsuit included snaps it claims posing in front of Lamborghinis and Ferraris, with statements that would “convince supporters that acting on the lead defendants’ recommendations would likely result in significant wealth, and by misrepresenting their trading methods as… accessible to anyone willing to learn.”
All eight were charged with conspiracy to commit securities fraud; Constantin was charged with three counts of securities fraud and involvement in monetary transactions involving property derived from certain illegal activities; Matlock and Deel were both charged with five counts of securities fraud; Rybarczyk was charged with four counts of securities fraud; and Hrvatin, Cooperman and Hennessey were each charged with two counts of securities fraud.
If convicted, each suspect faces a maximum sentence of 25 years in prison for conspiracy to commit securities fraud, the DoJ said. Constantin also faces a maximum sentence of 10 years in prison if convicted of illegal financial transactions.
“Securities fraud victimizes innocent investors and undermines the integrity of our public markets,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “As these allegations demonstrate, the department will continue to prosecute those who defraud investors by disseminating false and misleading information, including through social media, to line their own pockets.” ®
https://www.theregister.com/2022/12/15/im_playing_this_extremely_smart/ 8 charged with conspiracy to commit securities fraud • The Register