Social Media Scam-A-Rama
January 26, 2023
The Internet is a virtual playground for scam artists. While it is horrible that bad actors can get away with their crimes, it is also impressive the depth and creativity they go to for “easy money.” Fortune shares the soap opera-worthy saga of how: “Social Media Influencers Are Charged With Feeding Followers ‘A Steady Diet Of Misinformation’ In A Pump And Dump Stock Scheme That Netted $100 Million.”
The US Justice Department and the Securities and Exchange Commission (SEC) busted eight purported social media influencers who specialized in stock market trading advice. From 2020 to April 2022, they tricked their amateur investor audience of over 1.5 million Twitter users to invest funds in a “pump-and-dump” scheme. The scheme worked as follows:
“Seven of the social-media influencers promoted themselves as successful traders on Twitter and in Discord chat rooms and encouraged their followers to buy certain stocks, the SEC said. When prices or volumes of the promoted stocks would rise, the influencers ‘regularly sold their shares without ever having disclosed their plans to dump the securities while they were promoting them,’ the agency said. ‘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,’ said the SEC’s Joseph Sansone, chief of the SEC Enforcement Division’s Market Abuse Unit.”
The ring’s eighth member hosted a podcast that promoted the co-conspirators as experts. The entire group posted about their luxury lifestyles to fool their audiences further about their stock market expertise.
All of the bad actors could face a max penalty of ten to twenty-five years in prison for fraud and/or unlawful monetary transactions. The SEC is cracking down on cryptocurrency schemes given the large number of celebrities who are hired to promote schemes. The celebrities claim to be innocent, because they were paid to promote a product and were not aware of the scam.
However, how innocent are these people when they use their status to make more money off their fans? They should follow Shaq’s example and research the products they are associated with before accepting a check…unless they are paid in cryptocurrency. That would be poetic justice!
Whitney Grace, January 26, 2023
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