A Californian man has been charged by a US regulator for tweeting false information to his followers in a secret bid to inflate the value of his shares in a defunct cannabis company.
The Securities and Exchange Commission (SEC) this week announced fraud charges and an asset freeze against Irvine-based Andrew Fassari.
He’s alleged to have bought over 41 million shares in Nevada-based Arcis Resources Corporation (ARCS), before tweeting lies to his thousands of followers that the firm was reviving its operations and expanding its business, backed by “huge” investors.
Using the Twitter handle @OCMillionaire, Fassari is said to have made 120 tweets in December 2020 referencing “$ARCS,” dozens of which were labelled “misleading” by the SEC.
In one, he claimed that “this CEO has big plans for us,” and in another he apparently crowed about the firm’s “380,000 indoor cultivation 1 Million+ sq ft processing,” according to the SEC.
“The complaint further alleges that, over the next several days, ARCS’s share price skyrocketed, ultimately increasing over 4000%,” it noted.
“The complaint also alleges that Fassari made false statements about his own trading in ARCS. Between December 10 and 16 2020, Fassari allegedly sold all his shares in ARCS for profits of over $929,000, all while continuing to publish false and misleading information about ARCS and his trading in ARCS.”
The regulator’s complaint charges Fassari with violating the anti-fraud provisions of federal securities laws, and seeks a permanent injunction, disgorgement, prejudgment interest and a civil penalty from him.
The SEC also secured an order earlier this month temporarily suspending trading in ARCS securities.
This kind of “pump-and-dump” scam has become increasingly common of late thanks to the proliferation of social media and the ease with which investors can trade in securities today.