US Claims Facebook, Twitter Used in Pump-and-Dump Stock Scheme
Prosecutors say they discovered a multimillion dollar “pump and dump” scheme that used social media to tout stocks during an investigation of suspected cocaine trafficking by longshoremen.
The Manhattan U.S. Attorney’s office claims the defendant used websites, Facebook and Twitter to spur investors to buy penny stocks, Reuters reports. One longshoreman and 10 others are charged with conspiracy to commit wire fraud in the scheme.
The defendants allegedly made $3 million by selling the stocks after the price increased, while shareholders lost $7 million, according to a press release (PDF).
Meanwhile, eight longshoremen and three others face narcotics trafficking charges in an alleged scheme to smuggle millions of dollars of cocaine through ports in New York and New Jersey, the New York Times reports.
