DOJ alleges 8 Americans used social media to make $114M in 'pump and dump' investment scheme
The Department of Justice claims the 8 individuals utilized Twitter, Discord and other platforms to form the unofficial stock trading group they exploited
Eight individuals have been indicted by the Department of Justice on charges of security fraud.
The DOJ on Wednesday released a statement on the case, which names Edward Constantinescu (aka Constantin), Perry Matlock, John Rybarczyk, Gary Deel, Stefan Hrvatin, Tom Cooperman, Mitchell Hennessey and Daniel Knight as defendants.
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"The defendants collectively had over 1.5 million followers on Twitter to whom they allegedly disseminated false and misleading information about the securities that they pumped and dumped as part of the charged scheme," the DOJ explained.
Eight individuals have been indicted by the Department of Justice on charges of security fraud. (REUTERS/Andrew Kelly/File Photo / Reuters Photos)
According to the indictment, the group utilized multiple social media platforms — most prominently Twitter — to bring in investors from their substantial online following.
This strategy included the formation of an unofficial stock trading group, which they promoted and maintained via a Discord chat platform.
"In addition to their Twitter presence, the defendants also allegedly ran an online community for individual stock traders called Atlas Trading, which defendants promoted as one of the largest, free online communities in the world for individual stock traders and which had a chatroom called Atlas Trading Discord," the DOJ stated.
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The eight suspects are also accused of intentionally spreading misinformation to their followers and the Atlas Trading community in order to maximize profits from pumping and dumping the security investments.
According to the indictment, the group utilized multiple social media platforms — most prominently Twitter — to bring in investors from their substantial online following. (Thomas Trutschel/Photothek via Getty Images) / Getty Images)
Hrvatin, Cooperman and Hennessey face two counts of securities fraud each; Rybarczyk faces four counts, while Matlock and Deel are both charged with five counts.
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Constantin faces three charges of securities fraud as well as one count of engaging in monetary transactions in property derived from specified unlawful activity.
"If convicted, each defendant faces a maximum penalty of 25 years in prison for conspiracy to commit securities fraud and each charged count of securities fraud," the DOJ stated. "Constantin also faces a maximum penalty of 10 years in prison if convicted of engaging in unlawful monetary transactions."