The Securities and Exchange Commission on Monday announced fraud charges and an asset freeze against an Irvine, California-based trader who used social media to spread false information about a defunct company.
The trader secretly profited by selling his own holdings of the company's stock, the SEC said.
According to the SEC's complaint, Andrew Fassari used the Twitter handle @OCMillionaire to tweet false statements about Arcis Resources Corp. (ARCS), a defunct Nevada company with publicly traded securities, in December.
Fassari uses similar usernames on other social media sites, such as the website investorshub.com (iHub) and Instagram, according to the complaint, which was filed under seal in federal court in the Central District of California on March 2 and unsealed Monday.
The @OCMillionaire profile joined Twitter in July 2013, lists more than 13,000 followers, includes a picture of a black Ferrari, and states, in part: "Master short squeeze artist. #Pennystock Wizard."
Specifically, the complaint alleges that, on Dec. 9, Fassari began purchasing more than 41 million shares of Arcis stock shortly before tweeting false information about the company to his thousands of Twitter followers, including falsely claiming that it was reviving its operations, expanding its business, and being backed by "huge" investors.
The complaint further alleges that, "between Dec. 9 and 21, 2020, Fassari made approximately 120 tweets that referenced '$ARCS,' dozens of which were false and misleading."
For example, he tweeted, "$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[.]"
In seeking an injunction, the SEC alleges that Fassari continued to tweet about other stocks as recently as January and February.
