SEC charges influencers with $100 million Twitter and Discord fraud scheme
Christopher Hutton
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Eight social media influencers and self-proclaimed day traders were charged with fraud for promoting a $100 million “pump and dump” scheme.
The Securities and Exchange Commission announced on Wednesday that it was charging the investors with securities fraud due to the eight men using their large followings on Twitter and Discord to encourage investors to buy certain stocks. As the prices rose, the influencers then sold the shares without disclosing their plans to do so.
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“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, in a press statement.
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The SEC named Perry Matlock, Edward Constantin, Thomas Cooperman, Gary Deel, Mitchell Hennessey, Stefan Hrvatin, and John Rybarczyk as being involved in the scheme. The commission also charged Daniel Knight, a stock-trading podcast host known as the “Deity of Dips,” for promoting the other seven traders as “expert traders” and providing them a platform to sell their stock recommendations.
The charges serve as “another warning that investors should be wary of unsolicited advice they encounter online,” Sansone concluded.