The Run-Down: The Securities and Exchange Commission has charged 8 influencers in a pump-and-dump scheme that was promoted on Twitter and Discord
- The influencers portrayed themselves as successful traders and garnered a mass following on social media
- They influenced their followers to purchase certain stocks and then sold their shares without disclosing their plans to dump to their fans
- One influencer was charged with aiding and abetting after he hosted a podcast where he claimed the influencers to be expert traders and provided them with a forum to run their scheme
Why You Should Care:
The disclosure madness continues. We’re seeing a rise in financial schemes like never before. And this is prompting the SEC to crack down in a major way, and rightfully so. With the introduction of social media to our everyday lives, it’s become obvious just how influential it can be on the average person.
Influencers are using social media as a way to impact the masses on a macro level. And the SEC is taking notice. With that, they’re ramping up efforts to curb financial crimes, and in some cases, even just financial manipulation or influence.
We’ll say it until we turn blue in the face: disclose, disclose, disclose. Besides the obvious illegal behavior employed by the influencers, one major point the SEC is going after is the fact that they failed to disclose their intentions of dumping their stocks.
As you, your clients and consumers, or even just the people in your lives continue to use social media as a tool (beyond staying connected to the family in Utah no one ever gets to see) to actually promote, influence, or anything of the like – it’s important to understand the social, and legal, responsibility we all have.