The moderator of an online stock trading forum is settling charges from the U.S. Securities and Exchange Commission (SEC) for his role in an alleged US$100 million securities fraud scheme.
The SEC settled with Francis Sabo, known online as Ricky Bobby, for touting stocks on a Discord channel, and then selling his shares into the rising price action.
According to the SEC, “Sabo promoted himself as a trustworthy stock-picking guru. In reality, he was a seasoned stock manipulator.”
The regulator said that, working with several others, Sabo identified stocks to manipulate, acquired substantial positions in those securities, and then recommended the stocks in the online forum he moderated, along with the other participants in the scheme.
“He encouraged members of the stock-trading forum to purchase the selected stocks, often claiming that he too had bought or intended to buy these stocks for himself and that he intended to hold them. Instead, he sold his shares into the demand generated by his own deceptive promotions,” it said.
The SEC alleged that Sabo made over US$1 million from the scheme.
The regulator previously charged eight others for their participation in the deceptive promotions.
Sabo partially settled the charges, agreeing to be enjoined from future violations, with monetary sanctions to be determined at a later date. The settlement is subject to court approval.
Criminal charges were also filed against Sabo by the U.S. attorney’s office for the Southern District of Texas.