Federal prosecutors charged social media influencers active in last year’s meme-stock fever with engaging in a $114 million “pump and dump” scheme.
Constantinescu and Matlock are co-founders of Atlas Trading, a stock-trading forum on Discord. Constantinescu has more than 550,000 Twitter followers, according to the US Securities and Exchange Commission, which sued the eight men yesterday. Matlock has 340,000.
Edward Constantinescu, known on Twitter as “@MrZackMorris,” and Perry Matlock, whose Twitter handle is “@PJ_Matlock,” were among the defendants charged in an indictment unsealed Tuesday in federal court in Houston.
Also charged were Thomas Cooperman (“Tommy Coops”), Gary Deel (“Mystic Mac”), Mitchell Hennessey (“Hugh Henne”), Stefan Hrvatin (“LadeBackk”), Daniel Knight (“Deity of Dips”), and John Rybarczyk (“Ultra Calls, “The Stock Sniper”).
According to the indictment, the shares they hyped were in little-known companies, including GTT Communications Inc., Surface Oncology Inc., and Universe Pharmaceuticals Inc.. Prosecutors said the scheme ran from January 2020 to April 2022.
The MrZackMorris account mooned during the pandemic-induced stock trading frenzy that spurred a rally in so-called meme stocks like GameStop and AMC. Constantinescu, an immigrant from Romania, attracted thousands of retail traders to his Discord group by pitching his stock trading tips and advice.
According to the government's charges, the defendants falsely told their followers that they planned to hold stocks long-term, were increasing their positions or were aiming to hit higher price targets.
In fact, prosecutors claim Matlock and the others were selling their shares at artificially inflated prices.
The case is US v. Constantinescu, 22-cr-00612, US District Court, Southern District of Texas (Houston).