There’s a new generation of young scam artists, and they seem to be as savvy as they are dumb. There’s Sam Bankman-Fried, the schlubby crypto king who was just arrested after allegedly defrauding scores of customers. Now there’s the cadre of social media types who engaged in pump and dump schemes, while bragging about it in places where people could hear them.
As per Vice, the Securities and Exchange Commission has charged eight young influencers after they pumped stocks on places like Discord and Twitter as well as podcasts. They had handles like “@MrZackMorris, who would tweet things like this:
I love my homies on here. The rest of you can keep swinging on my nuts.
— Zack Morris (@MrZackMorris) December 14, 2022
According to the SEC complaint, the octet would identify a security they wanted to manipulate, then purchase it at a lower rate. Pretending to be skilled stock traders, they would then promote the stock to their followers, which included some 1.5 million put together on Twitter alone, so as to generate demand, often using false or misleading claims. The stock would thereby inflate in price. Then they would dump it.
To cover up their malfeasance, they would simply delete old tweets and Discord chats. Alas, they left one heck of a paper trail. For one thing, they had a habit of talking to each other about their wrongdoing on Discord voice chats they thought were private. They weren’t. In one such chat, one of them, who called himself the “Deity of Dips,” bragged about “robbing f*cking idiots of their money…”
The gang tried to cover themselves by claiming they were never formally giving their many followers advice. But the SEC isn’t buying that one, citing their propensity for sharing images of their lavish lifestyle, suggesting that their tips could lead to similar riches.
One of them, Perry Matlock, the “CEO” of Atlas Trading, would tweet things like “LET’S ALL GET RICH!” After dumping the stock, he would publicly lament everyone else’s bad break. Here’s how one of his pump and dumps went, according to the SEC complaint:
“Matlock, for example, having promoted FDS Pharma, Inc. (NASDAQ: HUGE) to followers, reported on Atlas on February 3, 2021: ‘HUGE I took the loss on it too. We will find a better one.’ Matlock in fact made approximately $27,734 dumping his HUGE shares the day he made that post.”
In other words, in today’s digital world, whether it be crypto of NFTs or even something as old fashioned as stocks, don’t fall for modern day version of Jordan Belfort, the swindler of The Wolf of Wall Street. Though at least Belfort knew better than to not brag about his wrongdoing on social media.