Stock market influencers indicted for ‘robbing idiots’ in a massive pump-and-dump scheme
The Securities and Exchange Commission (SEC) has charged a group of stock-focused social media influencers with fraud, after they allegedly racked up roughly $100 million by promoting pump-and-dump schemes, effectively duping their followers on platforms like Twitter and Discord, as well as on podcasts.
According to a court filing, the defendants “engaged in a scheme to ‘pump and dump’ securities based on false and misleading information and material omissions about those securities that the defendants published on social media platforms.”
While it appears that most of the group’s efforts utilized Twitter and Discord, two of the defendants also host a podcast called Pennies: Going in Raw, which was also allegedly used to promote securities.
Between January 2020 and April 2022, the SEC says, the group worked together to carry out a classic pump-and-dump: They purchased stocks, hyped the stocks on social media “with false, positive information about the security,” and then sold their shares while prices were riding a wave of inflated demand, making a profit. Interestingly enough, the scheme didn’t involve big-name companies or meme stocks, such as GameStop or Bed Bath & Beyond, but rather, small, largely unknown stocks, including GTT Communications Inc., Surface Oncology, Inc., and others.
The filing also included a rather damning exchange between two of the defendants, in which one allegedly told the other that they were “robbing f*cking idiots of their money.” These are the defendants and their respective Twitter handles:
Notably, many of the men utilize disclaimers on their social media bios that appear to be attempts to dodge legal risk—for example, Hennessey’s Twitter bio reads “Everything is my opinion.I actively trade positions.Not a pro,Not Financial Advice,probably do the opposite.”
That, evidently, wasn’t enough to keep the SEC at bay.
“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 statement. “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.”
Fast Company has reached out to several of the men for comment, in addition to the podcast team. Constantin, in an apparent response to the charges, tweeted “I love my homies on here. The rest of you can keep swinging on my nuts.”
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