U.S. authorities announced on Wednesday that at least eight individuals were charged in what has been described as a securities fraud scheme to manipulate stocks.
Investigators say the social media influencers allegedly gained around $144 million by using various social platforms including Discord and Twitter to manipulate the value of stocks, Reuters reported.
The "pump-and-dump" scheme, as it has been called, would see the individuals allegedly encourage followers to buy specific stocks as they promoted themselves as successful traders on the platforms.
SEC chief with the Enforcement Division’s Market Abuse Unit, Joseph Sansone, told the Associated Press, “The defendants used social media to amass a large following of novice investors and then took advantage of their followers by repeatedly feeding them a steady diet of misinformation.”
Those named in the SEC’s complaint were Perry Matlock (@PJ_Matlock), John Rybarcyzk (@Ultra_Calls) and Edward Constantin (@MrZackMorris) of Texas.
Thomas Cooperman (@ohheytommy) and Gary Deel (@notoriousalerts) of California were also named, along with Mitchell Hennessey (@Hugh_Henne) of New Jersey and Stefan Hrvatin (@LadeBackk) of Florida.
An eighth individual named in the case, Daniel Knight (@DipDeity) of Texas, co-hosted a podcast promoting the defendants as experts and traded in concert with them.
The U.S. Department of Justice said the defendants would promote their extravagant lifestyles to make their followers believe they were skilled traders.
Each faces a maximum penalty of 25 years in prison if convicted.