The SEC announced charges earlier this week against eight social media influencers in
a $100 million securities fraud scheme where these influencers are accused of using Twitter
and Discord to manipulate exchange-traded stocks.
There are federal criminal charges being brought against them in Texas too.
Seven of the accused influencers promoted themselves as successful traders on social
media cultivating hundreds of thousands of followers.
I know what you’re asking, how did these accused (but innocent until proven guilty)
fraudsters attract hundreds of thousands of followers to scam??
Well, lets look at their names… we’ve got Perry, Edward, Thomas, Gary, Mitchell,
Stefan and John.
They are all guys, so there can only be one way.
There’ll be pictures of cars, right?
Yep, that’s it, right in the SEC complaint pictures of cars, and not just cars, the worst
kind of influencer cars, wrapped cars.
I don’t know what it is about fraud victims, but they love a car with a gaudy wrap.
Look at that McLaren Longtail, the 765.
Here is a quick tip, if you are going to be ripped off with investment advice from an
influencer, be wary of investment advice from anyone who owns a McLaren.
Nothing depreciates like a McLaren.
I mean technically they are fast cars, but they’re always broken down.
You’ll never get anywhere quickly cause you keep having to pull over to pick up the
bits that fell off on the side of the road.
And look at that, he had his garage wrapped to match the car.
That’s a man with some spare time.
Who have we got next, Zack Morris and he has a Ferrari F8 (a sensible reliable car) and
he says “Treat Yo Self.”
Look at that, he’s verified on twitter too.
But the SEC says that Zack Morris not his real name, his real name is Edward – I guess
that verification doesn’t mean much.
But he’s a man who’ll spend eight bucks on pretty much anything.
Isn’t Zack Morris the blonde guy from saved from the bell?
I’m only so surprised, I never trusted him with his Motorola DynaTac.
If you had a Dyna Tac in high school, there is no real path for you other than internet
stock grifter.
I guess he did turn out better than Screech…
So, who’s next.
The Stock Sniper…
Do you think these guys friends call them by these online names?
Yeah, I’ just going out for a quick coffee with…
“The Stock Sniper”.
Well, the Stock Sniper has a lambo.
An Aventador, look at that, with the correct doors and everything.
Long time channel viewers know that I frown upon the Lamborghini Urus.
No self-respecting stock or crypto scammer is driving around in an SUV like a soccer
mom.
A urus is for one of those dads with a YouTube family channel, where he dresses all in Gucci
and makes videos dropping his embarrassed child off at school while he revs the engine
trying to be noticed.
That’s usually the first Urus video, a few weeks later there’ll be much more popular
video showing it being repossessed.
Eventually all of his videos have police mugshots as thumbnails, with varying levels of bruising.
That’s what you are signing up for when you buy a Urus.
It’s worth thinking about before making that decision.
Anyhow, this is a finance channel…
So the SEC alleges that the seven defendants when not busy replacing the broken suspension
components on their McLarens, or wrapping their garages purchased certain stocks and
then encouraged their followers to buy the same stocks by posting price targets or indicating
they were buying, holding, or adding to their stock positions.
There’s no mention of rocket emojis anywhere in the complaint, but I think we all know
there were rocket emojis.
Guys like this basically communicate with emojis.
The complaint says that when the share prices rose in the promoted securities, the influencers
regularly sold their shares without ever having disclosed their plans to dump the securities
while they were promoting them.
I mean that’s a betrayal isn’t it.
Who would have suspected that??
pumping and dumping – and without disclosing that you’re pumping and dumping.
I mean if you can’t trust the stock sniper, the guy from Saved By The Bell and a guy with
a wrapped McLaren in a wrapped garage, who can you trust??
But wait, that’s just seven people.
What did number eight do?
The SEC complaint says they were aided and abetted by Daniel Knight (that’s not the
guy from Knight Rider, is it??), who co-hosted a popular stock-trading podcast that promoted
the other defendants as expert traders and provided a platform for the other defendants
to deceptively promote the stocks they intended to dump.
Oh Daniel, you could have been Joe Rogan – a celebrity podcaster, but instead you chose
to be an assistant pumper.
Look at yourself Daniel, too lazy to even pump and dump yourself.
Did Daniel even have a criminal nickname?
Yep, Daniel was known as “The Deity of Dips.”
And the Podcast…
It’s called “Pennies: Going in Raw.”
Come on Daniel…
Going in Raw??
Does your mom know about this podcast??
Let’s look it up – is it popular??
Well, it’s #163 for Finance in Norway and #51 in Japan and the reviews seem to mostly
say that they are frauds and going to Jail. (which is not good).
That’s not what you want to see in a podcast review.
There is one five star review here, but it seems to quote Yoda, from the children’s
movie Star Wars.
I don’t actually know what a Yoda is, it looks like some sort of big eared slug.
Yeah, I mean if you saw that thing in your back garden you’d hit it with a shovel,
but anyhow it seems to like the “going in Raw Podcast” I don’t mean to boast, but
my podcast is #1 for finance in Liberia and the #3 finance podcast in Ireland.
I can’t seem to beat Joe Wiesenthal in Ireland, but no one’s even heard of him in Liberia.
I’m probably a huge celebrity there, like the Beatles.
I probably couldn’t even go to Liberia, I’d be mobbed by people – I wouldn’t
be safe.
OK, and there is a YouTube Channel too run by Tommy Coops and Mystic Mac called “The
Goblin Gang.”Hold on… is Yoda a Goblin??
I dunno…
If he is, I’d like to be clear that I was not threatening to hit either of these guys
with a shovel earlier.
Equally, I think I would be in my rights if I found them in my back garden…
I don’t know much about these things at all, and there’s no reason I’d expect
to come across a Yoda in my back garden, or a gang of them either.
I’ve gotta stop reading these SEC complaints.
Look no goblins or “goblin youtubers were harmed in the making of this video.
I should be clear about that.
Why are there so many children’s characters involved in financial crime this year?
If its not Harry Potter or Wood Nymphs, it’s Yoda or Kevin O’Leary.
Wait, I’m being told that Kevin O’Leary is not a children’s TV host??
Are you sure??
Ok…
You’re saying adults watch him.
By choice?
OK…
Anyhow, “The Goblin Gang” on YouTube is described as “Two multimillionaire day traders
filming their lives for the internet to see.”
OK…
Let’s take a look…
Ok, so, they have videos with names like We became DJ’s in South Korea – exclamation
mark.
And “trying the most expensive food in LA” – and in the picture he is holding a slice
of pizza.
I mean, maybe he ripped off people with stock advice, but that pizza guy must have really
seen him coming.
Oh wait, I know what happened.
He’ll have driven there in his McLaren – the pizza cost five dollars and then he lost 50
grand in depreciation, towing bills and repair costs.
Makes sense.
It would be an expensive meal.
Oh, what’s this…
I sold his McLaren for a Smart car.
That’s one of their video titles…
Yeah, well, that’s depreciation for you…
Shouldn’t have bought a McLaren ya goblin...
Another thing…
Why is this guy’s mouth open in every thumbnail?
Is he yawning?
I dunno, maybe it’s a goblin thing…
Here’s a tip, don’t take financial advice from a guy whose mouth is constantly hanging
open in surprise.
It’s a bad sign…
It worries me that some of the people watching this video might subscribe to the “Goblin
Gang” and if that’s true, you should be ashamed of yourselves…
That is all I have to say on that topic.
Anyhow, if there are two main characteristics to a good SEC Pump and Dump scheme complaint.
There’s the Here in My garage component…
where the crook (sorry alleged crook) shows the marks that he has a nice car, and then
there are the messages that go into evidence.
So, the things they said in public…
PJ Matlock said on Twitter “I’ll never get sick of pumping....
money into my followers bank accounts.
LETS ALL GET RICH!”
There you go… pumping, but no mention of dumping…
And a guy called Deel – which is some sort of nickname I think said “I buy stocks that
I think have a good chart and good news.
That’s how I always play it” I mean, come on Deel – you have given your whole system
away there.
Now anyone can buy stocks with a good chart and good news, there is no need to join your
Discord or listen to your “Going in Raw” Podcast.
I should probably stop saying the name of his podcast…
I’ll get demonetized on YouTube.
On paper these are hardly the most convincing stock pitches that I’ve ever heard, they
wouldn’t convince many people on their own, but when combined with a picture of a man
with his mouth wide open next to a wrapped McLaren.
Who could resist handing over their savings.
Oh, and then there is the “not financial advice” bit…
A good pumper and dumper always includes that.
This guy called Matlock says “Haters mad to see anyone winning and come out if the
stock be down 3% . All I post is information about it”.
I think that means – This is not Financial Advice…
These guys aren’t exactly eloquent.
The SEC complaint points out that the defendants included disclaimers on their Twitter accounts
that they were not providing stock recommendations or financial advice.
But that they still expected their followers to act on their tweets.
Constantin, on The Going In Raw Podcast said: “I understand that if I call something,
you know, everybody and their mom is going to buy.”
(I guess there is some truth to that if by everyone you mean the people in Finland not
listening to the 162 other bigger finance podcasts at that time.)
But yeay, they clearly thought of their “not financial advice” as financial advice to
be acted upon.
Of course the SEC also have their private messages in which they discuss the pumping
and also the dumping and go on and on about how dumb they think their followers are, and
I’m not going to read that stuff out to you because between the grammar, the punctuation
and the spelling…
Its unintelligible…
But they don’t think highly of their audiences.
I feel a lot of sympathy for the SEC agent who had to read through all of this and who
was also probably required to watch their goblin videos and listen to their “Going
in Raw” podcast.
The SEC complaint says that all of this bad grammar combined with images of wrapped cars
resulted in fraudulent profits of around $100 million.
Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit told the press
that "Today’s action exposes the true motivation of these alleged fraudsters and serves as
another warning that investors should be wary of unsolicited advice they encounter online."
And that is true.
Social media is filled with scammers pitching easy money schemes, and it is good to hear
that law enforcement are paying some attention.
The SEC warns on their website that Fraudsters may disseminate false information anonymously
or while pretending to be someone else.
They may make up credentials, create entirely fake profiles, or impersonate legitimate sources.
They point out that it can be difficult to track down who is behind a social media account,
and anonymity can make it harder for fraudsters to be held accountable.
They also warn about Testimonials and Celebrity Endorsements, that fraudsters sometimes pay
actors, social media influencers, and celebrities – to tout an investment on social media.
We have seen a lot of that over the last year or two.
I’d advise people to steer well clear of anyone selling an online course on how to
become rich, anyone pitching stocks, cryptocurrencies or passive income.
These things don’t tend to work out very well.
The fraudulent livestreaming day traders tell you that they are trading live, with a five
minute time lag, then they buy a thinly traded stock, right before it goes up.
The reason it goes up, is that their followers all bought the same stock five minutes later.
The trader then gets to dump their stock into the spike, and their audience only sees this
happening when it’s too late.
Anyone who has looked at the comments section of pretty much any YouTube video will see
hundreds of scam comments, written by people either pretending to be the host of the channel
or impersonating other well-known people.
They try to lure victims into private conversations, where they pitch some fraudulent investment
scheme.
There are the fake conversations held between dozens of bot accounts all talking about how
much some “trusted advisor” made them rich.
Recently there have been the Amazon crypto scams, where often 200 comments or more come
in within minutes of each other pitching some made up Amazon backed crypto.
Coffeezilla, James Jani and The Plain Bagel have all made videos explaining how those
scams work.
Coffeezillas channel is the best one on YouTube for exposing not just the con men, but exactly
what they do so you can spot it yourself.
I have a few moderators and some software that helps me delete and block the scam comments
in my as quickly as I can, but it is quite a bit of work, and quite a few still slip
through the cracks.
Amusingly a viewer told me how they were at first tricked by one of the scam comments
a little while ago and ended up texting with someone who claimed to be me.
They asked the scammer some questions about the video they had just watched and instead
of answering the questions the scammer kept asking them if they wanted to be entered in
a giveaway for a playstation.
They quickly worked out what was going on.
There is obviously a certain amount of humor that can be found in some of these stories,
but these scammers wouldn’t waste their time doing all of this stuff if it didn’t
actually work.
As ridiculous as all of this stuff seems, these eight guys managed to steal $100 million
dollars, and they will have ruined many lives in the process.
I have heard, but don’t know if it is true or not that the SEC are investigating many
of the influencers who claim to not be giving financial advice, but then charge for investing
or passive income courses where they then give pass out unlicensed financial advice
to their course members.
Many of these people have no actual experience in the world of finance, and no real knowledge
to share.
Even if they give the best advice they can, it can be harmful to their audiences.
As this weeks news shows you, some of them are just pump and dump schemes, designed to
rip people off.
If you liked this video, you should watch this one next.
Talk to you again soon, bye.