SEC Crashes Down on California Trader Over False Stock Tweets

By Chris Lange Published Mar 16, 9:42AM EDT

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SEC Crashes Down on California Trader Over False Stock Tweets — © BrianAJackson / Getty Images

The U.S. Securities and Exchange Commission (SEC) is bringing fraud charges, an asset freeze and other emergency relief against an Irvine, California-based trader. Allegedly, this trader is accused of using social media to spread false information about a defunct company, while secretly profiting by selling his own holdings of the company’s stock.

Social media has been a huge factor in trading recently with Reddit’s WallStreetBets and the GameStop trade. One takeaway from this is that investors should do their own due diligence and take what anyone posts on social media with a big grain of salt.

According to the SEC’s complaint, Andrew L. Fassari used the Twitter handle @OCMillionaire to tweet false statements about Arcis Resources (ARCS), a defunct Nevada company with publicly traded securities, during December 2020.

Specifically, the complaint alleges that, on Dec. 9, 2020, Fassari began purchasing over 41 million shares of ARCS stock shortly before tweeting false information about ARCS to his thousands of Twitter followers, including falsely claiming that ARCS was starting up its operations again, 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.

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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[.]”

The complaint goes even further to say that, over the next several days, ARCS’s share price skyrocketed, ultimately increasing over 4,000%. The complaint also alleges that Fassari made false statements about his own trading in ARCS. Between Dec. 10 and 16, 2020, Fassari allegedly sold all his shares in ARCS for profits of over $929,000, all while continuing to publish false and misleading information about ARCS and his trading in ARCS.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.