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News

Social Media Influencers Face Legal Setback In $114 Million Meme Stock Scheme

September 6, 2023 - Around 2 mins mins to read

Key Points:

  • Seven social media influencers lost their bid to dismiss criminal securities fraud charges in a $114 million meme stock scheme.
  • The judge rules that predictions or opinions made by influencers with malicious intent can be considered criminal acts, emphasizing that the First Amendment does not protect fraudulent activities.
  • Actions on social media leave a trail of evidence, potentially leading to serious legal consequences.
A federal court in Houston has dealt a blow to seven social media influencers accused of orchestrating a massive $114 million “pump and dump” scheme.
Social Media Influencers Face Legal Setback In $114 Million Meme Stock Scheme
Social Media Influencers Face Legal Setback In $114 Million Meme Stock Scheme 2

The influencers sought to have criminal securities fraud charges against them dismissed, but their bid was unsuccessful.

Former SEC Internet Enforcement Director John Reed Stark, known for his insights on such cases, reported on the development. According to Stark, the influencers had argued that their predictions and opinions on meme stocks were not criminal acts.

However, Judge Andrew S. Hanen disagreed, stating that predictions or opinions made by meme stock promoters with malicious intent to further a conspiracy could indeed constitute crimes.

Judge Hanen emphasized that the First Amendment does not shield fraudulent activities. If the government’s allegations hold true, the court believes that the defendant’s statements were made as part of a scheme to manipulate stock prices to their advantage, potentially harming the investing public. Such conduct, if proven, is not protected speech.

This ruling sends a clear message to stock and crypto promoters using social media to attract investors. Their actions are under scrutiny, leaving a trail of evidence that may lead to serious legal consequences.

While the influencers’ bid to dismiss charges has failed, the legal proceedings will continue, shedding light on the alleged $114 million pump-and-dump scheme.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

John Reed Stark

Meme Stock

memecoin

Pump-And-Dump

Social Media

Avatar of Harold

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

Social Media Influencers Face Legal Setback In $114 Million Meme Stock Scheme

Key Points:

  • Seven social media influencers lost their bid to dismiss criminal securities fraud charges in a $114 million meme stock scheme.
  • The judge rules that predictions or opinions made by influencers with malicious intent can be considered criminal acts, emphasizing that the First Amendment does not protect fraudulent activities.
  • Actions on social media leave a trail of evidence, potentially leading to serious legal consequences.
A federal court in Houston has dealt a blow to seven social media influencers accused of orchestrating a massive $114 million “pump and dump” scheme.
Social Media Influencers Face Legal Setback In $114 Million Meme Stock Scheme
Social Media Influencers Face Legal Setback In $114 Million Meme Stock Scheme 4

The influencers sought to have criminal securities fraud charges against them dismissed, but their bid was unsuccessful.

Former SEC Internet Enforcement Director John Reed Stark, known for his insights on such cases, reported on the development. According to Stark, the influencers had argued that their predictions and opinions on meme stocks were not criminal acts.

However, Judge Andrew S. Hanen disagreed, stating that predictions or opinions made by meme stock promoters with malicious intent to further a conspiracy could indeed constitute crimes.

Judge Hanen emphasized that the First Amendment does not shield fraudulent activities. If the government’s allegations hold true, the court believes that the defendant’s statements were made as part of a scheme to manipulate stock prices to their advantage, potentially harming the investing public. Such conduct, if proven, is not protected speech.

This ruling sends a clear message to stock and crypto promoters using social media to attract investors. Their actions are under scrutiny, leaving a trail of evidence that may lead to serious legal consequences.

While the influencers’ bid to dismiss charges has failed, the legal proceedings will continue, shedding light on the alleged $114 million pump-and-dump scheme.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.