(Bloomberg) — Social media influencer @MrZackMorris and several others active in last year’s meme-stock frenzy were charged by federal prosecutors with engaging in a $114 million “pump and dump” scheme.
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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.
Atlas Trading is a stock-trading platform on Discord that Constantinescu and Matlock co-founded. According to the US Securities and Exchange Commission (USSC), Constantinescu has over 550,000 Twitter followers. The eight men were sued yesterday. Matlock has 340,000.
According to the indictment, they hyped shares in obscure companies like GTT Communications Inc. Surface Oncology Inc., and Universe Pharmaceuticals Inc. Prosecutors stated that the scheme ran from Jan 2020 to April 2022.
MrZackMorris was born during the pandemic-induced stock-trading frenzy, which led to a rally in meme-stocks such as AMC and GameStop. Constantinescu, a Romanian immigrant who shared his stock trading tips with others, attracted thousands of retail trader to his Discord channel.
These practices grew during the social media pandemic. They were used by amateur and professional traders to meet the demand for stock analysis. Constantinescu spoke on Twitter last year to credit his success in retail trading with AMC, one of the stocks he frequently promoted.
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.
The government claims that the defendants told their followers they intended to hold stocks over the long-term, would increase their positions, or aim to achieve 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.
Prosecutors claim that Matlock and others were actually selling shares at artificially high prices.
This case is US. v. Constantinescu. 22-cr.00612, US District Court Southern District of Texas (Houston).
(Updates with dates to the alleged scheme in paragraph 4. In previous versions of this story, the amount of the alleged scheme was correct.
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