Facebook, Twitter Used in Multi-Million Dollar Stock Fraud Scheme
Facebook, Twitter Used in Multi-Million Dollar Stock Fraud Scheme
Posted 10/06/2010 at 6:13am
| by Paul Lilly
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Someone other than Mark Zuckerberg and Zynga figured out a way to make some serious cash using Facebook, just not legally. According to U.S. prosecutors, the popular social networking site, along with Twitter and a several other online portals, were all used in a "pump and dump" stock fraud scheme.
Officials uncovered the fraud during a two-year probe of suspected trafficking by longshoremen and others of 1.3 tons of cocaine said to be worth around $34 million. The Manhattan U.S. Attorney's office said 11 out of 22 people charged used more than 15 websites to "defraud the investing public into purchasing stocks that were being manipulated by participants in the conspiracy."
According to court documents, the social scandal illegally accrued more than $3 million, with shareholder losses estimated at over $7 million. Each suspect faces up to 20 years in prison if convicted.
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