Andrew Fassari charged with ‘pump and dump’ on twitter

Rick Steves

Mr. Fassari tweeted about 120 times to his thousands of followers that ARCS was reviving its operations, expanding its business, and being backed by “huge” investors, all false or misleading statements.

SEC bans biotech visionary investor after a $17 million loot claimed by fund

The Securities and Exchange Commission has charged Andrew L. Fassari with fraud and mandated an asset freeze and other emergency relief against the Irvine, California-based trader.

Mr. Fassari used social media to spread false information about a defunct company, while secretly profiting by selling his own holdings of the company’s stock.

Equipped with his Twitter handle @OCMillionaire, he made false statements about Arcis Resources Corporation (ARCS) during December 2020 shortly after purchasing over 41 million shares of ARCS shares.

Mr. Fassari tweeted about 120 times to his thousands of followers that ARCS was reviving its operations, expanding its business, and being backed by “huge” investors, all false or misleading statements.

“$ARCS 380,000 indoor cultivation 1 Million+ sq ft processing. WEEEEEEEEE This CEO has big plans for us” and “a ton of news coming and backed by huge investors for its #cannabis operation[.]”, where a few of his tweets.

His pump and dump scheme succeeded, as over the next several days, ARCS’s share price skyrocketed, ultimately increasing over 4,000%. The SEC alleges Mr. Fassari sold all his shares in ARCS for profits of over $929,000 in mid-December.

The SEC alleges that Fassari continued to tweet about other stocks as recently as January and February 2021.

Melissa R. Hodgman, Acting Director of the SEC’s Division of Enforcement, said: “We allege that Fassari profited by using social media to deceive investors. The SEC is committed to protecting investors by proactively monitoring suspicious trading activity tied to social media, and by charging those who use social media to violate the federal securities laws.”

The SEC’s complaint charges Fassari with violating the antifraud provisions of the federal securities laws and seeks a permanent injunction, disgorgement, prejudgment interest, and a civil penalty from Fassari.

In addition, on March 2, 2021, the SEC issued an order temporarily suspending trading in the securities of ARCS.

As social media trading picked up ever since the r/WallStreetBets mania in late January 2021, the SEC is likely to have a busy year policing the internet, looking for pump and dump schemes like these, and bringing them to justice.

The US financial watchdog has recently suspended 22 securities that were being promoted on social media with the only purpose of inflating the price.

Nick Morgan, a former SEC senior trial counsel who is now a litigation partner with law firm Paul Hastings, believes the chances of prosecutions are slim, though not unexpected. Mr. Morgan notes that the SEC did not suspend trading of GameStop even when the stock was going to the moon, fueled mostly by manic enthusiasm on online message boards. That was not the case with another recent run-up of a company called SpectraScience.

“The SEC has shown it is capable of suspending trading of a stock being touted on social media when there is evidence of violations of the federal securities laws,” he says. “In suspending trading of SepctraScience, the SEC cited ‘since late January 2021, certain social media accounts may be engaged in a coordinated attempt to artificially influence SCIE’s share price.’ We have seen no such allegation by the SEC about GameStop.”

 

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<