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Judge clears Perry Matlock, Edward Constantine, Thomas Cooperman, Gary Diehl, Mitchell Hennessy, Stefan Khrubatin and John Rybarsik of wrongdoing.
A federal judge has dismissed all charges against seven social media influencers accused by the SEC and Department of Justice of running a “stock price manipulation scheme” on Twitter and Discord.
On Wednesday, March 20, U.S. District Judge Andrew S. Hanen of the Southern District of Texas ruled that the government committed no criminal activity in a lawsuit alleging securities fraud and dismissed all charges against the defendants. Dismissed. The government’s lawsuit alleges that the individuals committed securities fraud because they posted on social media that they owned stock and why they bought the stock, but did not say when they intended to sell the stock. The theory was that it did. In his ruling, Hanen rejected the government’s claim that this constituted a crime, concluding that the defendants “did not deprive investors of money or property by making false representations.” A copy of the order form can be found at this link.
Those acquitted in this case were Perry Matlock, Edward Constantine, Thomas Cooperman, Gary Diehl, Mitchell Hennessy, Stefan Khrubatin and John Rybarsyk. The government’s case against them was scheduled to go to trial on April 1.
“The allegations were flawed, full of errors and easily disproved,” Hennessy said in the video. Posted Thursday on his X account @Hug_Henne. “I was arrested by the FBI and accused of illegal activities even though I was innocent.” [of] From the beginning…the Department of Justice never had any evidence that I had committed a crime, because I had not committed a crime. Hennessy said the government’s “baseless allegations have had a significant impact on me, my family, and my reputation.”
Hennessey was represented in the case by Jackson Walker partner Laura M. Kidd Cordova and associate Michael Murtha. “It is an absolute honor and privilege to represent Mitch Hennessy,” Cordova, who led the defense team, said in her statement. “It was clear from the beginning that he had committed no crime, and we are very pleased that the judge recognized that and dismissed all charges against him.”
In December 2022, the influencers were indicted by the SEC and the Department of Justice for allegedly encouraging “substantial social media follow-up.”[s]“While he may have purchased stocks by offering a price target or indicating that he would buy, hold, or add to a position in the stock,” He regularly sold his shares without making any changes.
Another person indicted in the case is Daniel Knight (aka @DipDeity), whom the Department of Justice charged with aiding and abetting the alleged scheme. On March 27, 2023, Knight entered a guilty plea to charges of securities fraud. Knight’s sentencing hearing is scheduled for July 29, according to the Department of Justice.
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