The Securities and Exchange Commission (SEC) of the United States filed a lawsuit against eight social media influencers for a $100 million stock manipulation scheme. The individuals include co-founders, podcasters, and YouTubers. The SEC filed the lawsuit with the Southern District of Texas’ U.S. District Court.
As per the latest details from a press release by the SEC, the eight social media influencers have been charged for a stock manipulation scheme. These individuals were using social media platforms, including Twitter and Discord, to manipulate the exchange-traded stocks.
SEC claims influencers promoted themselves as successful traders
As per the details from the SEC, the accused individuals scammed their following by portraying themselves as successful traders since January 2020.
The charges on these influencers are on the grounds of purchasing certain stocks and encouraging their followers to buy them. The SEC also stated that when the share prices of those particular stocks increased, the influencers dumped them without revealing their motive.
“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,” said Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit.
The charged individuals on the list include John Rybarcyzk, the creator of the Sapphire Trading forum, Edward Constantin (aka “MrZackMorris”), a co-founder of Atlas Trading, “CEO” Perry Matlock, YouTubers Thomas Cooperman, and Gary Deel, podcasters Mitchell Hennessey and Daniel Knight, and Twitter influencer Stefan Hrvatin (aka “LadeBackk”).
The SEC charges seek permanent injunctions, disgorgement, prejudgment interest, and civil penalties against each defendant for their manipulative actions in the $100 million stock scheme.