U.S. regulators allege that a stock promoter used social media to carry out a series of pump and dump schemes.
The U.S. Securities and Exchange Commission (SEC) charged the man behind the Twitter handle @BigMoneyMike6 — Michael Beck — for allegedly violating securities laws by touting penny stocks to investors without disclosing that he secretly planned to sell the same stocks he was talking up online.
In addition to tweeting his stock recommendations, the SEC alleged that Beck encouraged readers of his email group, TeamBillionaire, to buy the stocks ahead of his tweets.
He also allegedly paid third parties to post on investor message boards before his recommendations.
The allegations have not been proven.
According to the SEC’s complaint, Beck, who had 3 million followers on Twitter, “engaged in scalping of eight different penny stocks” by recommending stocks that he then sold at inflated prices, generating an estimated US$870,000 in illicit profits.
The SEC named Beck’s mother, Helen Robinson, as a relief defendant, alleging that she allowed him to trade stocks in her various brokerage accounts.