One Twitter user thought he could finesse penny stocks by lying to his followers so they would buy while he sold the stocks. Now, he in jail for his actions.
When the pandemic hit, Americans and businesses closed up shop with no end date in sight, meaning the stock market took a heavy hit. Many people took what money they had and invested in stocks that bottomed out and ultimately doubled or even tripled their money.
While many people made money out of the situation, you always have those who don’t do their own research and lose life-changing money. Many hopped on Reddit and Twitter and followed bad advice and lost tons of money. Now, it’s starting to seem like some of those stock gurus on social media were dumping their stocks while giving out bad information to people on purpose.
The AP is reporting Steven Gallagher from Maumee Ohio allegedly was partaking in the scheme and is now charged in federal court with securities fraud, wire fraud, and market manipulation. Gallagher is essentially being accused of amassing a following on social media to defraud regular, everyday people with pump and dump schemes while making over $1 million doing so.
On six occasions Gallagher bought substantial amounts of shares in companies that were under $1 per share, telling his follower to purchase them, then selling those shares after they rose without telling his followers. After selling, he would lie and say he was still holding his shares, which is illegal. Now, he will face the federal court system for his crimes.