A group of social media influencers has been charged with conspiring to manipulate stock prices in an alleged scheme that netted them $114m.
The eight men hyped market-traded securities online to followers without disclosing they planned to sell once prices rose, say prosecutors.
The influencers, aged 23-38, posted photos of their extravagant lifestyles.
They are charged with conspiracy to commit securities fraud, which carries a maximum of 25 years in prison.
Seven of the men are also charged with other financial crimes in the alleged pump-and-dump scheme, according to the US Securities and Exchange Commission (SEC) and the Department of Justice (DoJ), which jointly announced the charges on Wednesday.
On Twitter and Discord, the group “promoted themselves as successful traders”, the SEC said in a news release.
They posted “false, positive” information about each stock in order to “artificially drive up its price”, DoJ prosecutors added.
They then “secretly” sold off their own shares after the price had risen, and “concealed” the move from their followers.
The alleged crimes took place between January 2020 and April 2022. Each of the accused had over 100,000 Twitter followers as of this month.
The influencers used their platforms to encourage social media followers to share in their financial rewards, according to prosecutors.
“The defendants used their social media credibility to maximise their own profits at the expense of their followers,” prosecutors said.
The group ran an online community for stock traders called Atlas Trading. They also ran a chatroom called Atlas Trading Discord, which they used to “disseminate false and misleading information” to followers.
“Financial crimes like securities fraud may not be violent, but they certainly are not victimless,” said FBI Special Agent in Charge James Smith.
Criminal and civil charges were filed against them in the US District Court for the Southern District of Texas.