Eight men who allegedly used social media platforms to promote stocks they owned were charged by federal prosecutors with engaging in a $144 million “pump and dump” scheme.
Edward Constantinescu, known on Twitter as “@MrZackMorris,” and Perry Matlock, whose Twitter handle is “@PJ_Matlock,” were among the defendants charged in an indictment unsealed Tuesday in federal court in Houston.
Constantinescu and Matlock are co-founders of Atlas Trading, a stock-trading forum on the Discord social media platform. Constantinescu has more than 550,000 Twitter followers, according to the U.S. Securities and Exchange Commission, which sued the eight men yesterday. Matlock has 340,000.
The shares they hyped were in little-known companies including GTT Communications Inc., Surface Oncology Inc. and Universe Pharmaceuticals Inc., according to the indictment.
Also charged were Thomas Cooperman (“Tommy Coops”) Gary Deel (“Mystic Mac”), Mitchell Hennessey (“Hugh Henne”) Stefan Hrvatin (“LadeBackk”), Daniel Knight (“Deity of Dips”) and John Rybarczyk (“Ultra Calls, “The Stock Sniper”).
Lawyers for the eight men couldn’t immediately be located for comment.
According to the government, the defendants falsely told their followers that they planned to hold stocks for the long term, were increasing their positions or aiming to hit higher price targets.
Matlock allegedly told Atlas members in November 2020 that he did “NOT post plays so I can scalp 2 cents on my followers like they want you to believe.”
“I WOULDN’T BE HERE IF I DID THAT. . . . My GOAL is to help THIS group [make] money and help make THIS group successful,” he said, according to the indictment.
In actuality, Matlock and the others were selling their shares at artificially inflated prices, prosecutors claim.
The case is U.S. v. Constantinescu, 22-cr-00612, U.S. District Court, Southern District of Texas (Houston).
This article was provided by Bloomberg News.