Federal prosecutors and the Securities and Exchange Commission have charged seven social media influencers with using Twitter and Discord to perpetrate a securities fraud that netted them more than $100 million, CNBC reports.

Separate criminal and civil complaints also accuse another influential figure of aiding and abetting the scheme, authorities said Wednesday.

The seven accused in the securities fraud case used social media platforms to manipulate public stocks in a scheme dating back to at least January 2020, the SEC alleged.

According to a press release from the Securities and Exchange Commission, using Twitter accounts and stock trading chats on Discord with high traffic, the defendants “allegedly marketed themselves as successful traders” and encouraged their followers to buy stocks that they purchased

But when promoting those shares, they failed to inform their followers that they planned to sell them later when prices or trading volumes increased, according to the complaint.

The influencers allegedly profited by raising stock prices and selling them later, making a total of about $100 million, the SEC alleged.

Each of the defendants had more than 100,000 Twitter followers this month, the complaint says.

One of those accounts, @PJ_Matlock, run by Texas-based Perry Matlock, who calls himself the CEO of Atlas Trading, has been missing since Wednesday.

Others accused of securities fraud (and their Twitter accounts) are Edward Constantine (@MrZackMorris), Thomas Cooperman (@ohheytommy), Gary Deal (@notoriousalerts), Mitchell Hennessy (@Hugh_Henne), Stefan Horvatin (@LadeBackk) and John Rybarcyzk (@Ultra_Calls).

Daniel Knight (@DipDeity) was charged with aiding and abetting the alleged scheme, including co-hosting a podcast that promoted some of the main defendants as experienced traders.

The SEC alleged that Knight traded with other defendants and profited.

Some of the defendants’ Twitter bios since at least Wednesday have included disclaimers that appear to try to lessen their legal risks.

For example, Konstantin’s account says: “All my tweets are just my thoughts. I am not yet a financial advisor. Parody account”.

Hennessey’s says: “This is all my opinion. I actively trade positions. I’m not a professional, I’m not a financial advisor, I probably do the opposite.”

Rybarcyzk’s says: “Disclaimer: My tweets are NOT recommendations to invest in stocks. – Ideas posted on Twitter are NOT buy or sell signals. DO NOT TRANSACT ON SOCIAL MEDIA.”

Knight’s bio says, “NEVER buy/sell based on my posts.”

The criminal complaint and civil action were filed in the US District Court for the Southern District of Texas.

Twitter and Discord did not immediately respond to requests for comment.

The three influencers accused in the scheme who had direct messages on Twitter, Deel, Rybarcyzk and Knight, did not immediately respond to CNBC’s requests for comment.

Messages sent to Instagram accounts believed to be associated with Matlock, Constantine and Cooperman were not immediately returned.

A message to a LinkedIn account that appeared to be linked to Hennessey did not immediately respond to a request for comment. Horvatyn’s contact information could not be found.

(source: news.ro)