Multiple social media influencers were just charged by the SEC for allegedly defrauding people of over 110 million dollars in this video. I'm going to break down some of the allegations against these finfluencers and you'll see kind of the shenanigans that were happening both behind the scenes and in the faces of individuals now. Full disclaimer: I'm a finance YouTuber I'm an influencer and I'm on YouTube That also makes me a finfluencer, which is really disgusting to have any kind of association with that because I don't even know these people. What I do know though, is that I am a licensed financial advisor I operate an active ETF I'm a real estate broker I used to be a licensed lender, a licensed contractor, and I have a real estate startup that has raised a nearly 30 million dollars and we've got a reggae offering coming soon.

The point of me saying that is I'm under the scrutiny of a lot of different regulatory organizations and my goal is not to provide you personalized Financial Insight in this video. It's just to say that I'm doing my best to try to make sure that everything I'm doing is above board with the SEC and the law and that is what everybody should should strive to do personally. I Think in the future, anyone making Financial YouTube videos will probably have to be licensed I Just happen to already have that checked off. In the meantime, let's hop into the complaint because it's fascinating.

So here you can see this is the Security and Exchange Commission in a complaint. A complaint is a fancy name for a lawsuit filed today. You can see that some of the creators involved here are names like Mr Zach Morris whose name is neither Zach nor Morris Uh, we've got PJ Matlock Tommy Coops Mystic Mac Hugh Hiney hinny whatever lad Back, laid back, laid back yeah, Deity of dips and Ultra calls as well as the stocks stock sniper boy. Okay, so let's look at the allegations and then get into some specific scenarios.

I've already done the hard work for us for years. these individuals have promoted themselves as stock picking gurus In reality, these individuals and this is all an allegation by the SEC against these individuals I Want to make that clear: I Imagine they have some form of defenses, but the stuff in here is pretty damning. But then again, that's what lawsuits look like. The party that files a lawsuit, it's like oh damn, that looks intense and anyway, we'll let you make your own determination and clearly the court of law.

But in reality the SEC says these individuals are seasoned stock manipulators. They identify stocks ripe for manipulation, which just so you know, are usually small capitalization stocks. When a company is less than one billion dollars in market cap, it could easily be manipulated by influencers on the internet. Be careful about stocks under 1 billion dollars of assets under management.

and if you are not assets under management of market capitalization, if you're under 250 million dollars, it gets even worse. So, they would identify stocks right for manipulation, acquire substantial positions in these stocks, and then recommend those stocks as good Investments to their followers in Twitter In online stock trading forums they run, and on podcasts, they encourage their followers to purchase the selected stocks, often claiming that they likewise have bought or intend to buy these stocks themselves and hold them. However, instead, the defendants then sell their shares into the demand that their deceptive promotions generate. And this apparently has occurred between January 2020 and now.

And eight defendants earned approximately 100 million dollars from the stock manipulation scheme. And the SEC is looking for all of that money back plus civil penalties. Whoo boy! this is intense. So let's go ahead and get past how many followers they had all between somewhere between 100 000 and 500 000 followers.

So let's take a look at the summary of the scheme. The summary suggests that these individuals would often publish false and misleading information. This can be something like oh, the CEO said this. We think this is going to happen.

Oh, we think the stock is going to Rally in after hours where liquidity is really thin. so you take a small, thinly traded stock, and then you go into after hours where there's even less liquidity ripe for disaster. These are red flags to be aware of if you are an investor. small caps and after hours dangerous words.

And then these individuals would essentially pump the value of these stocks up. which could be something like saying hey, I think ticker symbol XYZ is going to go to the moon In after hours you look at it, it's a 50 million dollar market cap. In after hours, there's even less liquidity, so the order book gets eaten up and the stock can move very very quickly. With few trades, it's important to understand how order books work in the stock market.

Think about it in a very simplistic view: if there are only if there's only one person willing to sell shares in the after hours of ticker XYZ that's selling for ten dollars and that person's willing to sell two shares at ten dollars and a hundred shares at 15 and somebody comes in and says Market order good to cancel good for after hours with a high limit of twenty dollars or whatever and somebody comes in and says I want to buy 105 shares the order book is going to deploy uh purchases at ten dollars and then absorb all of those 100 shares at fifteen dollars and it will will look like that stock moved 50 percent just like that, because of a thinly traded order book. Now, generally during Market hours on largely traded stocks, the order book is much thicker and it could take billions of dollars to make any kind of actual substantial moves on very heavily traded large caps, or even index funds, for example, You generally don't move those sorts of stocks. That's why the smaller ones are so susceptible to this anyway. The defendants then provided each other an opportunity to buy these thinly traded stocks they all got in prior to the manipulation.

Then they would promote the stocks generating demand for the stocks to inflate the share prices, and then they would dump on their followers, even lying to their followers about why certain stocks declined. While it was actually them causing the declines by dumping their shares on their followers, they would also lie to people about losing money on stocks when they had actually profited handsomely. They say here. indeed, in private chats and Surah petitiously recorded secretly recorded conversations, they bragged and laughed about making profits at the expense of their followers.

This is so dirty. like this is the kind of stuff that deserves to be prosecuted to the full extent of the law. The defendants each included disclaimers on their Twitter accounts that they were not providing stock recommendations or financial advice. Yeah, providing a disclaimer provides you no absolutely no exemption from breaking the law.

You can't disclaim one thing, but then break the law that does you no good. In fact, if you look for example, at my Twitter I don't even have a disclaimer on there because I know everything I Do Any action I do will stand on its own and every action I take individually will be determined as either breaking the law or not. And of course, my goal and my belief is that I'm always making sure I'm well in compliance with the law. My goal is to continue to be in compliance with the law.

and and this is why for example, when I say hey, I'm going to provide potentially Financial advice but it's non-personal and it's for free Here on YouTube That's a very important clarification that I am a licensed financial advisor and I could say hey, I Think investing in real estate is a very sound financial decision. For most people, it might not be right for you, but again, people use this as a cop-out and then they pump stocks and illegally lie to people. That's when you get in trouble. When you lie, oh boy, the SEC is coming for you.

If you say you're selling a stock, you better be selling a stock. If you say you're holding a stock, you better be holding that stock. Otherwise they are coming for you as they should because otherwise you're manipulating the market. That's just wrong.

So they would tweet things like let's all get rich Let's Escape the nine to five let's get to Financial Freedom Let's get Fu money. Oh hope everybody banked on our trades and here are some of the things that they would do to try to tweet out their lifestyle: Oh, driving around in Lambos and glambos and fancy lifestyle? whatever. And they would portray these images while at the same time lying to their audience. And this is where take a listen to this.

While they would portray misleading trading methods accessible to anyone to potentially build significant wealth, the defendants repeatedly shared a sold shares in direct contradiction to their public statements to their followers on social media. This is a practice known as pumping the pump and dump and the SEC gives some wonderful examples here. For example, on March 1st there were conversations where they talked about manipulating a certain ticker Gtt and they talked literally in chats about saying things like this were robbing effing idiots of their money and they're talking about getting caught. They know what they're doing is wrong behind the scenes.

but not only were there conversations like this alleged in the complaint, but they would say things like this: Abvc strange action today Bag holder here with the little wavy hand suggesting that this person is a bag holder honestly doesn't make sense. Events ran from 3 30 to 4 40 yesterday and to 420s today, but faded due to shorts and scalpers. How dare the shorts sound? That's always. It's always somebody else manipulating the stock raw.

I'm sure they made money, but I hold my word and I don't dump on anyone. And then what does the SEC say right after that? Here, the individual claims he lost money and that he was a bag holder and that others caused the share price to drop and that. he would not dump shares on anyone. But what did the individual actually do? The individual actually made a profit of nearly 69 thousand dollars the day he posted that tweet by dumping his shares while recommending the stock to his followers saying he was essentially a diamond handing bag holder and with them while lying to their faces.

So disgusting, so disingenuous. It's so wrong. You know when I sold my stock portfolio in January of 2020 and uh, 2022 and I told everybody about it I got a lot of hate for selling because people were like wait, Kevin we thought we were holding I'm like. This is why I'm transparent is because in the short term people might be mad at you.

but you have to be honest with people. You cannot lie to people. You must must must be honest to people even if it's hard news. It's better to give hard news and be honest than to lie.

But these people weren't about to give hard news because they knew exactly what they were doing because they were scammers. These are true definitions of fraud Assuming what the SEC here is alleging is true and it looks pretty damning. Here's another one. Arec stopped me guys.

sorry about this one I Lost 20K Here looks like 1.5 million shares were sold over five. Sorry to anyone who took uh who took with me who took losses with me right? Had great news this morning but didn't want to go. I'll look for us I'll look for a better one for us So talks about losing 20 000 actually made more than seven thousand dollars dumping the stock that day and over six thousand dollars selling his shares the day before that. Yikes.

But it's not just examples like this. There are more examples like on CEI stock, another thinly traded retail stock. In the past, I've warned about falling momentum and when you get into these thinly traded stocks, they usually only run for as long as there's momentum and hype around them. and now we come to find out that it's because there are people who are pumping these stocks just to dump them.

It's a fraud. Within the next four minutes after posting, adding CEI with you that's cheap Within the next four minutes Matt sold 165 000 shares, the other another individual deal sold 60 000 shares. Cooperman sold 240 000 shares as the price Rose by a penny per share. All of them then posted about CEI again CEI With the CEO saying no reverse split, they have to think it will get to a dollar I Feel good with swinging this one for a week for a run-up? no reverse split on CEI Adding CEI here for a swing.

Last time it touched these levels on The Daily we saw a move of three plus lots. This is basically saying hey, look, if they're not going to do a reverse split, the company must be really excited about the future potential. So let's Diamond hand this thing. Meanwhile, they've already dumped.

So disgusting. or actually they had already dumped. But then the SEC alleges Immediately after these posts, they began selling more shares. Within two minutes, one had sold 95 000 shares, another 198 000, another one selling all remaining 165 000 shares.

This is literally fraud I mean it's on Twitter on your phone posting a tweet, putting it down and then going over hitting the sell button. It's so disgusting because it's the opposite. It's one thing. it's totally one thing.

if you're like okay, I'm in my Weeble I'm gonna sell Tesla you sell all your Tesla and then you tweet out yo I just sold all Tesla I'm freaked out about Elon Musk right? That's one thing. You're being honest. This is the complete opposite. It's fraudulent.

So disgusting. So while Deal A deal was promoting CEI on Twitter he was simultaneously selling his shares, liquidating 60 000 shares Matlock again over and over again. wasn't just here. Look at this.

CEI let's squeeze. What did they do Continued to sell shares to Their audience despite telling his followers he was holding shares and intended to add to the position in after hours deal immediately began selling. This is just straight fraud. These folks deserve to be next to Sam Bankman Freed with how disgusting this is.

Either way, I think this stock will eventually get back to one dollars, but I'll gracefully make my exit around one dollar. When did they exit around 50 cents almost immediately after Scumbag I added more? C I Swing this morning. Over the next two minutes, what happened Sold Liars Liars Liars Nose grows long despite telling his followers he would be adding all day to a swing deal Soon began selling his entire position I Read this whole thing. Okay, I'm just giving you the highlights here.

Too many of you act like little when there's a dip. it's all part of the game. And then right after that tweet, what happened, Marcelling I ain't selling under a three bleeded. uh, delete that.

Believe that, Probably right. And then what happened, despite telling his followers that he was holding overnight because a huge day is coming already began to dump shares CEI Gets ready for the next leg up. We're aiming for four dollars today. Oh, he waited a whole five minutes this time, then sold all his shares.

see I Short Screwed. See you at ten dollars while I Dump Now scumbags. This is disgusting. These messages also contain specific price targets claiming that they were holding on to a stock because we're about to hit a new high.

However, in contrast to their claims, they were that they were holding a L, Z, and stocks and even adding to their position, they were selling all or most of their stock below the price targets. The same was true of V I S L and within minutes all of them sold, Sold, Sold, Sold, sold of telling their participants that they were amassing part shares. Look at this one. V I S L yon wake me up at ten dollars and then in a chat room.

Hey guys I Think my tweet worked I think my tweet definitely helped it out right here and then immediately began selling shares for a 19 Cent gain per share on a penny stock. Keep in mind any stock under five Dollars is considered a penny stock. Even though generally we think of a penny stock, we think a dollar or less technically a stock under five dollars is a penny stock. Knight tweeted all hail V I S L and the Piss Missile and then went right back to selling.

These people are just straight up D-backs I Smell an After Hours gapper After hours. Gapper is kind of like what I described with the order book where all of a sudden you get like a big gap up because somebody ate up the order book I Smell an After Hours gapper implying that people might make big money in the after hours thinly traded and then start a dump dump dump dump. I Mean this. This goes on to Torch Trch another meme stock.

Uh, that that momentum torch I smacked 50k on this news. She's going to all-time highs immediately after the Tweet sold 30 000 shares I Mean this is so in-depth Abvc Biopharma we got you there too over and over and over again. And the SEC is pissed and they're looking for a trial to bring these people to Justice Honestly, good job SCC This is impressive. They put together a in case here and if all that stuff is true jail, that dessert deserves jail.

People need to be made an example of you. Have to be honest with people as hard as it is. you know, especially in like bear markets and recessions. people like stunks go down.

That's what happens right? Like, times are tough, times are painful. Just don't lie to people. Disgusting. absolutely disgusting manipulation.

and I'm so proud of the SEC for this and this is the kind of organization that I want to make sure I Respect to the to the end because all Financial YouTubers should look at the SEC and go and send thank you letters and say thank you. Forgetting the trash and the people who sink the reputation of influencers out of the industry, they gotta go Disgusting. Thank you so much for watching folks. We'll see in the next one.