SEC Sues "Influencer" in $100 Million Stock Manipulation Scheme

SEC Charges Additional Social Media Influencer in Stock Manipulation Scheme

On May 25, 2023, the Securities and Exchange Commission brought partially settled charges against Francis Sabo (also known as “Ricky Bobby”) in a $100 million securities fraud scheme in which Sabo, along with several other defendants previously charged by the Commission in December 2022, used social media platforms to manipulate exchange-traded stocks.

According to the SEC, since at least January 2020, Sabo promoted himself as a trustworthy stock-picking guru and cultivated a substantial following in the Atlas Trading forum on Discord, a free online forum purporting to provide educational content about trading and securities markets. The SEC contends that Sabo, like the previously charged defendants, purchased certain stocks and then encouraged his substantial social media following to buy those selected stocks by, among other things, posting price targets or indicating he was buying, holding, or adding to his stock positions. However, as the complaint alleges, when share prices and/or trading volumes rose in the promoted securities, Sabo regularly sold his shares without ever having disclosed his plans to dump the securities while he was promoting them. The SEC further alleges that from at least January 2020 through December 2022, Sabo made over $1 million from his participation in the stock manipulation scheme.

Theranos Founder Elizabeth Holmes Is Expected to Enter Prison Tuesday

Theranos founder Elizabeth Holmes is expected to report to prison on Tuesday to start her 11-year sentence for defrauding investors, marking a closing chapter in the downfall of one of Silicon Valley’s most prominent entrepreneurs after revelations about the company’s unreliable blood-testing technology.

Defense Attorneys Question Value of Voluntary Self-Disclosure With SEC, DOJ

Last May, Gurbir Grewal, director of the SEC’s Division of Enforcement, told attendees of the Securities Enforcement Forum West, “Too often, we see defense counsel—sometimes even including [SEC enforcement division] alums—engage in conduct that seems to have little purpose other than to delay our investigations,” according to a transcript of the speech on the SEC website.

Grewal also preached the benefits of cooperation, saying that lawyers who do cooperate in a genuine way can help secure more lenient terms for their clients.

At this year’s conference in San Francisco Tuesday, Grewal said what got lost in last year’s speech is “we all have to do better, including on our side of the ‘v.’”

“It shouldn’t be a game of ‘gotcha,’” he said. “We all have a part to play and want to get to the right answer as soon as possible.”

The director said his early priorities of robust enforcement and penalties and creating a culture of proactive compliance remain the same. He also noted that the agency will hold “gatekeepers accountable in the right cases.”

Ex-trader admits to second insider trading scheme

The U.S. attorney’s office for New Jersey announced that Sean Wygovsky pled guilty to one count of securities fraud in U.S. district court in connection with an insider trading scheme involving pending merger deals. He is scheduled to be sentenced on Sept. 27.

According to the charging information, Wygovsky used information that he acquired at his firm about planned merger transactions involving special purpose acquisition companies (SPACs) to tip off a friend who worked at a New Jersey-based brokerage firm about the upcoming deals.

When the firm was invited to participate in specific SPAC acquisitions, it placed those companies on an internal restricted list and warned employees not to trade in those SPACs. Yet, it’s alleged that Wygovsky repeatedly tipped off his friend and broker, Christopher Matthaei, who then traded on that inside information, generating US$3.4 million in illicit profits.

Winklevoss Twins’ Gemini Crypto Exchange Pivots After Layoffs, Losses, Earn

Since going all-in on Bitcoin over a decade ago, Tyler and Cameron Winklevoss have had their share of ups and downs. But these days, issues around the billionaire twins’ Gemini crypto exchange just seem to keep piling up.

The SEC is suing Gemini as regulators crack down on the industry. The exchange’s market share has shrunk versus rivals even as crypto prices have rebounded. A banking partner wants to break up. And now this month, a crucial due date on a loan — that, if repaid by its bankrupt lending partner’s parent company, could help hundreds of thousands of Gemini customers recoup some of the $900 million worth of crypto deposits trapped in its defunct Earn product — has come and gone as negotiations on a resolution drag on.

Robert Kennedy Jr Slams SEC for Protecting Banks Instead of American People — Calls for Crypto-Friendly Commissioners

U.S. presidential candidate Robert F. Kennedy Jr. (RFK Jr.) expressed admiration for bitcoin while criticizing the regulatory approach of the Securities and Exchange Commission (SEC) towards the cryptocurrency industry in an interview with Thestreet, published Friday. RFK Jr. is a nephew of former U.S. President John F. Kennedy and a son of former U.S. Attorney General Robert F. Kennedy.

Sharing his intention to nominate crypto-friendly individuals to the SEC should he be elected president, Kennedy stated:

“I don’t want people on the SEC commission who are anti-crypto. At most, they should be neutral, and we should have people on there who are from the crypto community.