Social media influencers were indicted after allegedly using their social media platforms to orchestrate a “pump and dump” scheme in the stock market.
“Pump and Dump” Scheme
Eight social media influencers, four of which are from the Houston area, were indicted over the alleged “pump and dump” scheme. It was found that they used their social media presence or platform to orchestrate the scheme and misled their followers to invest.
In a published article in Houston Public Media, the U.S. Department of Justice said that at least $114 million in profits on shares of stock they sold at artificially inflated prices.
What is the “Pump and Dump” Scheme?
The “pump and dump” scheme is boosting the interest of the investors or their followers to invest in a certain stock. From this, it will increase the value of the stock while concealing the intention of the social media influencers to sell it at a high price.
According to the same source report, these social media influencers have huge followers of 1.5 million. They were also alleged to have utilized an online community for securities traders called Atlas Trading Discord as part of the scheme.
Who are these Social Media Influencers?
These social media influencers are the following:
- Edward Constantinescu, 38, of Montgomery
- Perry “PJ” Matlock, 38, of The Woodlands
- John Rybarczyk, 32, of Spring
- Daniel Knight, 23, of Houston
- Gary Deel, 28 years old
- Tom Cooperman, 34,
- of Beverly Hills, California
- Stefan Hrvatin, 35, of Miami, Florida
- Mitchell Hennessey, 23, of Hoboken, N.J.
If convicted, each of them will a maximum of 25 years imprisonment for conspiracy to commit securities fraud and for each count of securities fraud.