8 Social Media Influencers Were Charged by U.S. Authorities For Securities Fraud Scheme
WASHINGTON, December 14 (Reuters) – The U.S. prosecutors requested the indictment of eight people in an excessive securities fraud scheme on Wednesday, alleging they raised about one hundred fourteen million dollars from the use of Twitter and Discord to control stocks.
The eight men are supposed to attract buyers on social networking structures, then go on to participate in the so-called “pump and dump” system by broadcasting specific actions to their fans. This followed by dumping them as soon as the fees go up, this is according to prosecutors for the Southern District of Texas.
The United States Securities and Exchange Commission (SEC) stated that it had filed a civil lawsuit against defendants related to the scheme, saying that seven of the defendants used Twitter and Discord to raise shares with a promissory note. He stated that the eighth person had been charged with aiding and abetting the scheme with his podcast.
U.S. Authorities Charged 8 Social Media Influencers For Fraudulent Acts
According to a post by Yahoo News, “Security fraud victimizes innocent buyers and undermines the integrity of our public markets, ” stated Assistant Attorney General Kenneth Polite of the Justice Department’s Criminal Division.
The individuals charged had been Texas citizens Edward Constantinescu, Perry Matlock, John Rybarczyk, and Dan Knight, at the side of California citizens Gary Deel and Tom Cooperman, Stefan Hrvatin of Miami, and Mitchell Hennessey of Hoboken, New Jersey.
According to the court records, Matlock has now pleaded not guilty after his arrest last Tuesday. His attorney has no longer immediately responded to a request for comment.
Rybarczyk and Deel did not immediately respond to requests for comment. The others were not immediately available during that time. (Reporting by Chris Prentice and Nate Raymond; Editing by Mark Porter and Lisa Shumaker)