(HedgeCo.Net) The Securities and Exchange Commission has announced that it filed an emergency action, and obtained an injunction and asset freeze, against Steven M. Gallagher for allegedly committing securities fraud through a long running scheme to manipulate stocks using Twitter.
The SEC’s complaint alleges that, since at least December 2019, Gallagher used his Twitter handle, @AlexDelarge6553, to make thousands of tweets encouraging his numerous followers to buy stocks in which Gallagher had secretly amassed holdings. As alleged, Gallagher would then sell those stocks at inflated prices, while he continued to recommend others buy them —never disclosing that he was selling the stocks.
“The complaint alleges that Gallagher used his followers for his own financial gain, tweeting out false advice to pump up the price of stocks he owned, so he could sell for a profit,” said Richard Best, Director of the SEC’s New York Regional Office. “This case is a reminder that investors should be wary of taking financial advice from unverified sources on Twitter and other social media platforms.”
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Gallagher with violating the antifraud provisions of the federal securities laws. The complaint seeks, among other relief, a permanent injunction, disgorgement, prejudgment interest, civil penalties, and the asset freeze granted by the court.