SEC and DOJ Charged Eight Social Media Influencers in an Alleged $100 Million Stock Manipulation Scheme on Twitter and Discord

The SEC convicted seven social media influencers who had hundreds of thousands of followers on Twitter and discord of securities fraud. They were accused of manipulating stock prices to gain at least $100,000,000 in ill-gotten gains. An eighth person was also charged by the agency with aiding and abetting this “scheme.”

The Justice Department’s Fraud Section filed criminal charges against each of the eight defendants. Each defendant could be sentenced to a maximum of 25 years imprisonment for conspiracy and one count of securities fraud if convicted. According to the DOJ, the scheme was worth at least $114 million between January 2020 and April 2022.

According to the SEC seven defendants promoted themselves to be “successful trader” since January 2020. They allegedly bought certain stocks and encouraged their “substantial social network following” to purchase the stocks by setting price targets or indicating that they were adding, buying, or holding onto their stock positions. According to the agency, however, when shares prices rose and/or trading volumes increased in securities they were hyping they promoted, the individuals “regularly traded their shares without ever having disclosed that they planned to dump the securities while promoting them.”