Hudson County Influencer Used Twitter In Stock Manipulation: Feds

HUDSON COUNTY, NJ — A Hudson County man and six other people used Twitter and Discord to manipulate their followers into buying stock as part of a $114 million stock manipulation scheme, said the U.S. Securities and Exchange Commission on Wednesday.

The federal agency announced three charges against Mitchell Hennessey, 24, of Hoboken, who goes by the Twitter handle @Hugh_Henne. He was charged with one count of conspiracy to commit securities fraud, and two counts of securities fraud, said the U.S. Department of Justice.

According to the SEC, Hennessey was among six defendants accused of promoting themselves as successful stock investors and cultivating 1.5 million followers on Twitter and in stock trading chat rooms on Discord.

An eighth man has been accused of promoting the men on his podcast.

Officials said starting in January 2020, the men "used their extensive social media presence on Twitter and Discord to hype interest in particular securities by posting false and misleading information in order to 'pump' the prices of those securities, while concealing their intent to later 'dump' their shares by selling them at the artificially inflated prices."

As part of the "pump and dump" scheme, they often posted photos of their lavish lifestyle, the federal government charged.

"The defendants used social media to amass a large following of novice investors and then took advantage of their followers by repeatedly feeding them a steady diet of misinformation, which resulted in fraudulent profits," Joseph Sansone, chief of the SEC Enforcement Division’s Market Abuse Unit, said in a statement.

The SEC's complaint, filed in the U.S. District Court for the Southern District of Texas, seeks permanent injunctions and civil penalties against each defendant.

Here are the other people charged:

• Perry Matlock of Texas, or @PJ_Matlock on Twitter
• Edward Constantin of Texas, or @MrZackMorris on Twitter
• Thomas Cooperman of California, or @ohheytommy on Twitter
• Gary Deel of California, or @notoriousalerts on Twitter
• Stefan Hrvatin of Florida, or @LadeBackk on Twitter
• John Rybarcyzk of Texas, or @Ultra_Calls on Twitter

All defendants are charged with one count of conspiracy to commit securities fraud. Additionally, Constantin is charged with three counts of securities fraud and one count of engaging in monetary transactions in property derived from specified unlawful activity; Matlock and Deel are both charged with five counts of securities fraud; Rybarczyk is charged with four counts of securities fraud; and Hrvatin, Cooperman, and Hennessey are each charged with two counts of securities fraud.

The defendants made their initial court appearances yesterday. If convicted, each defendant faces a maximum penalty of 25 years in prison for conspiracy to commit securities fraud and each charged count of securities fraud. Constantin also faces a maximum penalty of 10 years in prison if convicted of engaging in unlawful monetary transactions.

The complaint also charged Daniel Knight of Texas, or @DipDeity on Twitter, with aiding and abetting the scheme by co-hosting a podcast on which he promoted many of the other individuals as expert traders and provided them with a forum, the federal government said.

Investors can find additional information, including the warning signs of fraud, at Investor.gov.