Misuse of social media is not a new issue. The possibility of social media postings leading to allegations of criminal wrongdoing — also not a new idea. What is relatively new is the idea that the United States Securities and Exchange Commission (SEC) would go after a man for his alleged misuse of Twitter.
What are the claims?
The SEC just accused a Twitter user of a securities fraud. The feds claim the man ran a scheme to manipulate the stocks through a series of Tweets. The SEC states the man had “numerous” followers who he would encourage to buy stocks. After they bought the stocks, he would allegedly cash out.
The feds are using this as an example of the need for the public to be wary of where they get their financial advice.
What are the penalties for this type of a crime?
The current complaint filed by the SEC with the United States District Court for the Southern District of New York requests the court grant a permanent injunction essentially stopping the man from using social media, freeze his assets and demand he pay the government various monetary awards.
If the allegations are supported, the man could also face imprisonment. The exact sentence would vary depending on the details of the allegations. The United States Department of Justice (DOJ) has noted that these allegations are just the beginning. The SEC’s investigation also led to additional charges, including wire fraud and market manipulation.
The lesson: post wisely on social media. Activities like those described above can lead to a federal investigation and allegations of securities fraud.