The US Securities and Exchange Commission and the Justice Department have charged eight social media influencers with running a stock trading scheme, government officials said Wednesday.
According to the SEC, they manipulated stock trades using their platforms on Twitter and Discord and amassed profits of around $100 million. The SEC complaint was filed in US District Court for the Southern District of Texas. A federal grand jury has also indicted them for allegedly conspiring to commit securities fraud and related crimes, according to the US Justice Department's Fraud Section.
Since January 2020, seven of the accused allegedly built large followings on social media by branding themselves as trading experts and then promoted certain stocks in Discord chatrooms and on Twitter. After buying stocks, the influencers allegedly urged their followers to do so while sharing prices and their intent to make moves like buying and holding. However, the SEC alleges that they "regularly sold their shares without ever having disclosed their plans to dump the securities."
Those charged with securities fraud include Perry Matlock of Texas (Twitter handle @PJ_Matlock), Mitchell Hennessey of New Jersey (@Hugh_Henne), Edward Constantin of Texas (@MrZackMorris), John Rybarcyzk of Texas (@Ultra_Calls), Stefan Hrvatin of Florida (@LadeBackk), Thomas Cooperman of California (@ohheytommy) and Gary Deel of California (@notoriousalerts).
The eighth defendant, Daniel Knight of Texas (@DipDeity) has been charged with "aiding and abetting the alleged scheme" for allegedly using his podcast to promote some of the defendants and then trading and profiting with them.
The defendants that CNET was able to reach didn't immediately return a request for comment.