Tausi Insider

U.S. prosecutors on Wednesday said they have charged eight individuals in a securities fraud scheme, alleging they reaped about $114-million by using Twitter and Discord to manipulate stocks. The eight men allegedly purported to be successful traders on the social media platforms and then engaged in a so-called “pump and dump” scheme by hyping particular stocks to their followers with the intent to dump them once prices had risen, according to prosecutors in the Southern District of Texas. The U.S. Securities and Exchange Commission (SEC) said it has filed related civil charges against the defendants in the scheme, claiming that seven of the defendants used Twitter and Discord to boost stocks. It said the eighth was charged with aiding and abetting the scheme with his podcast. “Securities fraud victimizes innocent investors and undermines the integrity of our public markets,” said Assistant Attorney General Kenneth Polite of the Justice Department’s Criminal Division. The individuals...

One out of 10 public companies in the United States is committing securities fraud, costing investors US$830-billion each year, but most go undetected, according to a new study co-authored by a University of Toronto professor . And he says he fears fraud may be more prevalent in Canada. The study by Alexander Dyck, a professor of finance at the University of Toronto’s Rotman School of Management, and two co-authors, used a real-life situation as the basis for the study: The 2001 collapse of accounting firm Arthur Andersen, and the need for its clients to find a new auditor. Andersen had roughly 20 per cent of U.S. public companies as clients before the Enron Inc. scandal, and in the wake of its association with Enron, the firm’s former customers endured heightened scrutiny by their new auditors, investors and the public. “What we saw post-the Andersen blow-up was that [companies] that had Andersen prior were more likely to have revealed fraud,” Mr. Dyck said in an interview with Taus...