Top U.S. Financial Regulator Charges Eight Social Media Influencers in Alleged $100M Stock Scheme

The SEC charges seven social media influencers that allegedly made more than $100 million through illicit gains.
Both the criminal and civil complaints did not disclose which stocks were promoted in the alleged pump-and-dump scheme.

The federal prosecutors and the Securities and Exchange Commission (SEC) today announced charges against eight social media influencers who had amassed hundreds of followers on Twitter and Discord in a $100 million securities fraud scheme.

The seven charged with securities fraud were also charged with conspiracy to commit securities fraud by the DOJ. Authorities alleged the defendants used the social media platforms to manipulate exchange-traded stocks in a scheme going back to at least January 2020.

The defendants labeled themselves as successful stock traders and cultivated almost two million followers on Twitter collectively. They allegedly purchased certain stocks and encouraged their substantial social media followers to buy those selected stocks by posting price targets or indicating they were buying, holding, or adding to their stock positions.

Today we announced charges against eight social media influencers in a $100 million securities scheme in which they used Twitter and Discord to manipulate exchange-traded stocks.https://t.co/zzrchqFlqg

— U.S. Securities and Exchange Commission (@SECGov) December 14, 2022

The above-mentioned defendants ran an online community for individual stock traders called Atlas Trading, which “defendants promoted as one of the largest, free online communities in the world for individual stock traders” and which had a chatroom called Atlas Trading Discord.

The blinded followers were not aware that while the fraudsters were promoting the stocks they planned to sell shares once prices or trading volumes rose.

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.

The following seven individuals were charged with securities fraud:

Perry Matlock -@PJ_Matlock
Edward Constantin -@MrZackMorris
Thomas Cooperman -@ohheytommy
Gary Deel -@notoriousalerts
Mitchell Hennessey – @Hugh_Henne
Stefan Hrvatin – @LadeBackk
John Rybarczyk -@Ultra_Calls

The SEC’s complaint, filed in the U.S. District Court for the Southern District of Texas, seeks permanent injunctions, disgorgement, prejudgment interest, and civil penalties against each defendant, as well as a penny stock bar against Hrvatin. Other Criminal charges against all eight individuals also were filed in a parallel action brought by the Department of Justice’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.