The U.S. SEC (Securities and Exchange Commission) has filed a lawsuit against eight individuals from Atlas Trading for a $100 million stock manipulation scheme. The eight individuals include the firm’s co-founders, podcasters, and YouTubers. The SEC submitted the filing to the U.S. District Court for the Southern District of Texas. The defendants are charged with breaking both Section 10(b) of the Securities Exchange Act and Section 17(a) of the Securities Act.
The SEC claimed that bloggers who took significant holdings in certain stocks profited at least $100 million. The defendants recommended certain positions to their followers. Afterward, they sold their shares in response to the demand they created. Alzamend Neuro, Torchlight Energy Resources, and ABVC companies were some of the cited fraudulent stocks. There was no mention of crypto or other digital assets in the case.
The list of defendants includes 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; the founder of Sapphire Trading forum John Rybarcyzk; and a Twitter influencer Stefan Hrvatin ( aka “LadeBackk”).
Furthermore, the lawsuit designates Constantin, Matlock, Cooperman, Deel, Hennessey, Hrvatin, and Rybarcyzk as “primary defendants.” On the other hand, Knight is said to have been “aiding and abetting” them. Additionally, the SEC is asking for a court order that would prevent defense attorneys from engaging in any of the actions listed in the complaint. This could essentially include giving stock trading advice.
The SEC is watching
The SEC has been quite busy watching the financial sector of the US. The body recently filed a lawsuit against the founder of the defunct crypto exchange FTX, Sam Bankman-Fried (SBF). Bankman-Fried is charged by the SEC with “orchestrating a massive, years-long fraud” by using “billions of dollars” of FTX customers’ money “for his own personal benefit and to help grow his crypto empire,” according to the complaint.
Furthermore, the agency is also tied in a legal battle with Ripple over the alleged sale of unregistered securities.