SEC names Twitter user @AlexDelarge6553 in stock market pump and dump scheme

SEC names Twitter user @AlexDelarge6553 in stock market pump and dump scheme

Investing has always been challenging, especially for amateurs. Scammers are everywhere. As time has progressed, they have become bolder than ever.

Such is the recent case of Steven Gallagher, who was recently caught the attention of the US Securities and Exchange Commission for using social media – mainly Twitter – to run what the government alleges is a fraud scheme.

The SEC announced on October 26 that an emergency action and asset freeze of Steven M. Gallagher had taken place due to his involvement in running an alleged scheme targeted to manipulate stocks. The SEC alleges that his main source for market manipulation was Twitter.

The user name @AlexDelarge6553 has not yet been taken down by Twitter. However, the user has made his account private – an option Twitter gives its users to protect tweets from outsiders.

Pump and dump

The SEC has accused Gallagher of making thousands of tweets encouraging his followers to invest in stocks. Once the users started to flock in and buy those stocks, the SEC says that Gallagher sold those stocks at higher inflated prices while never disclosing to followers that he was selling those stocks.

The SEC acted on multiple complaints it received, alleging that the accused was using his Twitter influence and Twitter followers for financial gain, giving out false advice that would help pump up the price of the stock he owned and then secretly selling them for a profit.

Such fraud is nothing new. What is new is the method that is in place, such as the influence of social media. Just recently, a new crypto token appeared on the market after the Netflix show Squid Game (SQUID). Three days after its launch, the token price jumped to 35,000% and declined 99% when Twitter flagged its account over suspicious activity. Interestingly, the token’s white paper had grammatical errors, and the token’s website was just one month old. Many investors lost their money in the pump and dump scheme.

Do not get financial advice from Twitter

Looking at the case of Gallagher, the director of the SEC’s New York office, Richard Best, said: “This case is a reminder that investors should be wary of the financial advice they take from unverified sources on Twitter and other available social platforms.”

Currently, the SEC has filed official charges on the accused at the US District Court for the Southern District of New York, charging him with the antifraud provisions of the federal securities laws. The government complaint seeks civil penalties and an asset freeze. At the same time, the SEC has asked the victims to contact Alexdelarge6553victims@sec.gov.

Investing is the best way to beat inflation and have the best bet to have something when retiring. However, little to no knowledge is always dangerous. Unless investors are careful, they can lose all of their precious savings.


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