Prosecutors say Ohioan used Twitter in 'pump-and-dump' stock scam – cleveland.com

NEW YORK — An Ohio trader in penny stocks was arrested Tuesday on charges alleging he earned over $1 million illegally by lying repeatedly to his over 70,000 Twitter followers to get them to buy stocks in what authorities are calling a new social media-infused twist on an old stock manipulation game.Steven Gallagher, 50, of Maumee, Ohio, was charged in New York federal court with securities fraud, wire fraud and market manipulation. He was arrested in Ohio. It was not immediately clear who would represent Gallagher at an initial court appearance in Ohio.U.S. Attorney Damian Williams said in a release that Gallagher “brought old-school boiler room tactics to the Twitter age, and operated a social media pump-and-dump scam that defrauded ordinary investors.”Ricky J. Patel, head of the New York office for Homeland Security Investigations, said Gallagher turned “lies into cash.”“Pump and dump stock schemes cause mistrust in the market and have real victims who often invest large sums of money, only to have their hopes shattered by a fraudster’s greed,” Patel said.Court papers in Manhattan alleged that Gallagher began defrauding followers of a Twitter account he started in September 2019 under the alias “Alex DeLarge,” a gang leader character who…
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