The Securities and Exchange Commission (SEC) has announced charges against a California man accused of using Twitter to spread false claims about a ‘defunct company’ after purchasing millions of shares. This alleged ‘pump and dump’ scheme, according to the SEC, involving the tweeting of ‘false statements’ about Arcis Resources Corporation (ARCS), which was involved with the cannabis market.
The SEC detailed the case on Monday, March 15; the complaint was filed in federal court on March 2, but was only unsealed this week. The matter involves Twitter user “@OCMillionaire” (Andrew L. Fassari), who is accused of using tweets to spread ‘false statements’ about ARCS.
The SEC alleges that Fassari started purchasing more than 41 million ARCS shares on December 9. Soon after, the SEC claims, the California man started tweeting ‘false information’ about the company to thousands of followers, with the government agency accusing Fassari of making false claims including a revival of the business and expansion of its operations.
The SEC likewise claims that Fassari made ‘false statements’ regarding his own ARCS trading and that amid the tweets, the company’s shares increased more than 4,000-percent. The agency alleges that Fassari sold his shares between December 10 and 16, 2020, making an alleged profit of more than $929k.
In a statement, SEC Division of Enforcement Acting Director Melissa R. Hodgman said:
We allege that Fassari profited by using social media to deceive investors. The SEC is committed to protecting investors by proactively monitoring suspicious trading activity tied to social media, and by charging those who use social media to violate the federal securities laws.
The SEC has temporarily suspended ARCS securities trading and has charged Fassari with ‘violating the antifraud provisions of the federal securities laws.’ The revelation comes only weeks after the SEC published an advisory on short-term trading and the risks associated with making investment decisions based on social media posts.