The U.S. Securities and Exchange Commission (SEC) recently filed a complaint yesterday alleging that the founders of the crypto trading firm, Atlas Trading with a number of others are guilty of manipulating stock prices.
The complaint which was filed with the U.S. District Court Southern District of Texas stated that the conspirators leveraged their popularity to carry out their fraudulent scheme and made them earn about $100 million in just three years.
The Founders Allegedly Used Their Social Media Influence
The U.S. Securities and Exchange Commission (SEC) alleged that the two founders of the crypto trading firm, Atlas Trading, in a bid to manipulate the prices of stock leveraged their influence on social media pages, particularly Twitter and Discord.
Perry Matlock and Edward Constantin, the founders of Atlas Trading have a pretty strong followership on social media and the SEC has accused them of hiding under posing as stock experts and making reliable predictions to get their followers to massively acquire small-cap stocks while they at the same time would dispose their own shares, selling them at a much higher price than they had acquired them.
Alongside the co-founders, the SEC alleged that a couple of other “influencers” like Daniel Knight, Gary Deel, Thomas Cooperman, Mitchell Hennessey, John Rybarcyzk, and Stefan Hrvatin were involved in the carefully orchestrated fraud scheme.
These people, according to the SEC, will carefully scout for stocks that could be easily manipulated, acquire them at a relatively low price, and then go on Twitter and Discord to promote it to their large followership, which will lead to a large percentage of them acquiring the shares, causing the demand and price for the shares to skyrocket.
They will thereafter proceed to dump their own shares at a much higher price owing to the demand that they had driven due to their promotion of the shares. The deceitful scheme has been going on for about three years, and over those years, the team has made roughly $100 million.
Sam Bankman-Fried Is Allegedly Guilty Of Same
The former CEO of the failed FTX exchange, who was recently arrested in the Bahamas and has been charged by the SEC for intentionally setting out to defraud his investors, has been alleged to be guilty of unfair social media usage too.
However, it appears that it is not only Bankman-Fried, as several other key players in the industry have been accused of being guilty as well. They allegedly would intentionally drive the attention of their followers to unregistered securities in order to make their prices skyrocket and profit from it.
According to the recent public statement made by Michael Saylor, the co-founder and executive officer of MicroStrategy, the SEC may be privy to the situation.
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