A tame stock trading forum that sold off their stock to maximize profits: The Securities and Exchange Commission (SEC) filed a parallel civil complaint
A forum called Atlas Trading used a number of platforms to promote their stock purchases, including a platform on which they made false statements about the stock’s value and intent to hold it. The group sold off the stock to maximize their profit after followers drove up the price. The Securities and Exchange Commission (SEC) filed a parallel civil complaint. Eight men are charged with aiding the conspiracy through a finance show, while seven are charged with securities fraud. Between January 2020 and April 2022 there was an explosion of interest in securities trading.
The alleged scheme dated back to at least January 2020 and involved a nationwide network of participants, including four of the defendants who reside in Texas; two in California; one in New Jersey and one in Florida.
Other alleged members of the scheme helped promote Atlas on various platforms, the complaint said, and in some cases knowingly discussed their market manipulation on Discord voice chats whose transcripts the SEC included in the complaint.
CNN reviewed a number of archived tweets belonging to one of the defendants. The account associated with the defendant tweeted frequently last May about Gamestop and AMC, two so-called “meme stocks” that saw significant public interest and trading last year.
The SEC’s complaint calls for the US District Court for the Southern District of Texas to impose fines and to require that the defendants give up their allegedly ill-gotten gains, along with a ban on future misconduct.
The alleged scheme was active until about April of this year, according to a Justice Department release, and resulted in at least $114 million in profits.
Atlas Trading members were known to be stock pumpers, as shown by the show on social media. An account called GuruLeaks warned about the group on several occasions. But the replies include defenders — “who cares … I’ve been in since Feb,” reads one tweet from May 2022.
The criminal charges include conspiracy to commit securities fraud and, for several of the defendants, multiple counts of securities fraud. Each of the charges carries a maximum possible sentence of 25 years in prison.
The case is a rare example of legal repercussions in the world of finance influencers, who pair unofficial trading advice with displays of success, in the instance of the eight defendants here. The indictment quotes text and recorded voice conversations between alleged scheme participants.
At one point, Knight mocks an unnamed co-conspirator who frets about getting caught and says he wants to make buys “the right way”: “The f*cking right way? Knight said we are robbing idiots of their money. THerisks are reproduced from the indictment. In the same conversation, Cooperman describes the mechanics of how Rybarczyk pumps stocks:
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So, what he does is he reminds it, and then just five minutes later all his little sidekicks start liking it, and adding him, so it builds the hype back up. It happens every single time. They have this sht down to a fcking science. It’s great.
The stocks that were manipulated included China SXT Pharmaceuticals, Torchlight Energy Resources, GTT Communications, Surface Oncology, Alzamend Neuro, Universe Pharmaceuticals, ABVC BioPharma, and Datchat. The Justice Department would love for people who believe they were a victim of the scam to call the number listed in the press release.