The SEC charges 8 social media influencers in a $100 million stock manipulation scheme promoted on Twitter and Discord
- The Securities and Exchange Commission said 8 social media influencers used Twitter and Discord in a $100 million stock manipulation scheme.
- The influencers have over 2 million followers combined across platforms, and often posted photos of their wealth.
The Securities and Exchange Commission charged eight social media influencers in a $100 million securities fraud scheme, according to a Wednesday press release.
The regulator said the individuals used Twitter and messaging app Discord to promote stocks they had purchased, then would dump shares after telling their followers to buy them.
Since at least January 2020, seven of the defendants billed themselves as successful traders to their hundreds of thousands of followers on social media, according to the announcement, but then when the prices of securities they promoted would rise, those individuals would shed their positions.
This kind of fraud is what's often called a "pump-and-dump" scheme.
The individuals are not household names, but together have over two million followers across platforms, and regularly post photos of their wealth.
"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," Joseph Sans one, Chief of the SEC Enforcement Division's Market Abuse Unit, said in a statement.
The social media usernames of the influencers listed in the press release include @PJ_Matlock, @MrZackMorris, @ohheytommy, @notoriousalerts, @Hugh_Henne, @LadeBackk, @Ultra_Calls, and @DipDeity. They are now facing federal criminal fraud charges.
"Today's action exposes the true motivation of these alleged fraudsters and serves as another warning that investors should be wary of unsolicited advice they encounter online," Sansone said.