Case 4:22-cv-04306 Document 1 Filed on 12/13/22 in TXSD Page 1 of 39
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
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`Civil Action No. 22-CV-____ (___)
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`JURY TRIAL DEMANDED
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` Plaintiff,
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`v.
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`SECURITIES AND EXCHANGE COMMISSION,
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`EDWARD CONSTANTIN, a/k/a “MrZackMorris,”
`a/k/a “Edward Constantinescu,”
`PERRY MATLOCK, a/k/a “PJ Matlock,”
`THOMAS COOPERMAN, a/k/a “Tommy Coops,”
`GARY DEEL, a/k/a “Mystic Mac,”
`MITCHELL HENNESSEY, a/k/a “Hugh Henne,”
`STEFAN HRVATIN, a/k/a “LadeBackk,”
`DANIEL KNIGHT, a/k/a “Deity of Dips,” and
`JOHN RYBARCYZK, a/k/a “Ultra Calls,” a/k/a
`“The Stock Sniper,”
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`Defendants.
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`COMPLAINT
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`Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
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`following against the defendants:
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`SUMMARY
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`1.
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`To their legions of followers on social media, the eight defendants have, for years,
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`promoted themselves as trustworthy stock-picking gurus. In reality, they are seasoned stock
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`manipulators. They identify stocks ripe for manipulation, acquire substantial positions in these
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`securities, and then recommend those stocks as good investments to their followers on Twitter, in
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`online stock-trading forums they run, and on podcasts. They encourage their followers to
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`purchase the selected stocks, often claiming that they likewise have bought or intend to buy these
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`stocks for themselves and hold them. Instead, the defendants sell their shares into the demand
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`that their deceptive promotions generate.
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`2.
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`Seven of the defendants—Perry Matlock, Edward Constantin, Thomas
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`Cooperman, Gary Deel, Mitchell Hennessey, Stefan Hrvatin, and John Rybarcyzk—carried out
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`the scheme, coordinating the acquisition of shares, promoting the shares to their followers, and
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`dumping the shares for substantial profits. They were aided and abetted by Daniel Knight, who
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`with Hennessey, co-hosted a popular stock-trading podcast that promoted the other defendants as
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`expert traders and provided a platform for other defendants to deceptively promote the stocks
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`they intended to dump.
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`3.
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`From at least January 2020 through present (the “Relevant Period”), the eight
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`Defendants earned approximately $100 million from this stock-manipulation scheme.
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`VIOLATIONS
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`4.
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`As a result of the conduct alleged herein, defendants Constantin, Matlock,
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`Cooperman, Deel, Hennessey, Hrvatin, and Rybarcyzk violated, and unless restrained and
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`enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 (“Securities Act”)
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`[15 U.S.C. §77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15
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`U.S.C. §78j(b)], and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5(a), (b) & (c)]. Knight aided
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`and abetted, and unless restrained and enjoined, will continue to aid and abet these violations of
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`the Securities Act and the Exchange Act.
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`NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
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`5.
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`The Commission seeks a permanent injunction against the Defendants, enjoining
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`them from engaging in transactions, acts, practices, and courses of business of the type alleged in
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`this Complaint; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this
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`Complaint, together with prejudgment interest; civil penalties pursuant to Section 20(d) of the
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`Securities Act [15 U.S.C. §77t(d)] and/or Section 21(d)(3) of the Exchange Act [15 U.S.C.
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`§78u(d)(3)]; and such other relief as the Court may deem appropriate. The Commission further
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`seeks an order barring Hrvatin from participating in any offering of a penny stock, pursuant to
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`Section 20(g) of the Securities Act [15 U.S.C. §77t(g)] and/or 21(d) of the Exchange Act [15
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`U.S.C. §78u(d)].
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`JURISDICTION AND VENUE
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`6.
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`This Court has jurisdiction over this action pursuant to Section 22(a) of the
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`Securities Act [15 U.S.C. §77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15
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`U.S.C. §§78u(d), 78u(e), and 78aa].
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`7.
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`Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.
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`§77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa]. Certain of the acts, practices,
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`transactions and courses of business alleged in this Complaint occurred within the Southern
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`District of Texas, and were effected, directly or indirectly, by making use of means or
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`instrumentalities of transportation or communication in interstate commerce, or the mails. Four
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`Defendants reside in the Southern District of Texas, where they communicated with co-
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`defendants in furtherance of the fraud scheme and made numerous false and deceptive
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`statements as described herein.
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`DEFENDANTS
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`8.
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`Edward Constantin, a/k/a “MrZackMorris,” a/k/a “Edward Constantinescu,” 38,
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`is a resident of Houston, Texas. His Twitter account, @MrZackMorris, had more than 551,000
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`followers as of December 2022. Constantin is a co-founder of Atlas Trading, a stock-trading
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`forum on the social media platform Discord, which offers users the ability to communicate via
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`voice calls, video calls, and text messaging, among other things.
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`9.
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`Perry Matlock, a/k/a “PJ Matlock,” age 38, is a resident of The Woodlands,
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`Texas. His Twitter account, @PJ_Matlock, had more than 340,000 followers as of December
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`2022. Matlock refers to himself as the “CEO” and co-founder of Atlas Trading.
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`10.
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`Thomas Cooperman, a/k/a “Tommy Coops,” 34, is a resident of Beverly Hills,
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`California. His Twitter account, @ohheytommy, had more than 129,000 followers as of
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`December 2022. Cooperman is a member of the electronic music group Breathe Carolina and,
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`with Gary Deel, runs a YouTube channel called the “Goblin Gang,” described as “[t]wo multi-
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`millionaire day traders filming their lives for the internet to see.”
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`11. Gary Deel, a/k/a “Mystic Mac,” 28, is a resident of Beverly Hills, California. His
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`Twitter account, @notoriousalerts, had approximately 144,000 followers as of December 2022.
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`With Cooperman, Deel runs the Goblin Gang YouTube channel.
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`12. Mitchell Hennessey, a/k/a “Hugh Henne,” 24, is a resident of West New York,
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`New Jersey. Along with Daniel Knight, Hennessey hosts the “Pennies: Going in Raw” podcast,
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`which promotes Atlas Trading. His Twitter account, @Hugh_Henne, had more than 237,000
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`followers as of December 2022.
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`13.
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`Stefan Hrvatin, a/k/a “LadeBackk,” 35, is a resident of Miami, Florida. His
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`Twitter account, @LadeBackk, had more than 150,000 followers as of December 2022.
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`14.
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`Daniel Knight, a/k/a “Deity of Dips,” 28, is a resident of Houston, Texas. With
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`Hennessey, Knight is a co-host of the Pennies: Going in Raw podcast. His Twitter account,
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`@DipDeity, had more than 171,000 followers as of December 2022.
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`15.
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`John Rybarcyzk, a/k/a “Ultra Calls,” a/k/a “The Stock Sniper,” 32, is a resident
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`of Spring, Texas. His Twitter account, @Ultra_Calls, had more than 267,000 followers as of
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`December 2022. Rybarcyzk is the founder of Sapphire Trading, another stock trading forum on
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`Discord.
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`16.
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`Defendants Constantin, Matlock, Cooperman, Deel, Hennessey, Hrvatin, and
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`Rybarcyzk are referred to herein as the “Primary Defendants.” With the addition of Knight, the
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`collective group of all defendants is referred to herein as the “Defendants.”
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`I.
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`SUMMARY OF SCHEME
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`FACTS
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`17.
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`The Defendants engaged in a long-running fraudulent scheme to manipulate
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`securities by publishing false and misleading information in online stock-trading forums, on
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`podcasts, and through their Twitter accounts. The Primary Defendants, aided and abetted by
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`Knight, engaged in a pattern of conduct, sometimes referred to as “scalping,” in which they
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`recommended the purchase of a particular stock without disclosing their intent to sell that stock.
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`They generally executed their scheme in three phases. First, one or more of the Primary
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`Defendants identified a security to manipulate (the “Selected Stock”) and purchased shares of
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`that particular security. By sharing the name of the Selected Stock among some or all of the
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`group, the Defendants provided each other with the opportunity to purchase shares at lower
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`prices prior to the manipulation. Next, they promoted the stock to their followers on podcasts
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`and/or social media platforms in order to generate demand and inflate the share price. Typically,
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`the Primary Defendants announced price targets, teased upcoming news about the company,
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`and/or stated their intention to buy shares or hold their current positions for longer periods.
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`Finally, after promoting the stock to their followers in these ways, the Primary Defendants sold
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`their shares into the demand generated by their recommendations. When the scheme succeeded,
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`the Primary Defendants were able to sell their shares at higher prices and make profits. In order
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`to cover up their scheme and continue perpetrating it, the Primary Defendants at various points
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`deleted old tweets and Discord chats, and lied to their followers about the reasons why particular
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`stock picks were followed by declines in the prices of those stocks, obscuring their own roles in
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`causing losses among their followers and other retail investors.
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`18.
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`None of the Primary Defendants disclosed that they were either planning to sell,
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`or were actively selling, a Selected Stock while recommending that their followers buy it. Nor
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`did any of the Primary Defendants disclose that they were coordinating with each other to
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`manipulate the price and volume of trading in the stocks they were promoting. Moreover, the
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`Primary Defendants’ deception extended beyond their omissions and outright lies about their
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`intentions regarding, and views about, the securities they were promoting. For instance,
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`sometimes they peddled false or misleading news about particular stocks through social media or
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`podcast interviews. On some occasions, the Primary Defendants lied about losing money on a
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`particular stock when in reality they had profited handsomely, in order to generate trust among
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`their followers—trust that was necessary to perpetuate the scheme and ensure that their followers
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`would continue to purchase shares based on their future recommendations. Indeed, in private
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`chats and surreptitiously recorded conversations, they bragged and laughed about making profits
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`at the expense of their followers.
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`19.
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`Defendants’ specific roles in the fraudulent scheme varied depending on the
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`timeframe and the specific security at issue. Typically, only a subset of the Primary Defendants
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`participated in the manipulation of a particular stock. Those Primary Defendants would agree on
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`a Selected Stock in which they would each establish a position (i.e., “load” or “load up” on the
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`stock). After loading up on the Selected Stock, most, if not all, of the Primary Defendants who
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`had established positions in that stock would recommend it to their followers. The Primary
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`Defendants often referred to “swinging” or taking a “swing” position in the stock, by which they
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`conveyed to their followers that they intended to hold onto the stock for at least a day, and likely
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`longer. As the Primary Defendants involved in the deceptive promotion of a particular stock
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`often informed other Defendants of their plans, those not directly promoting the stock could—
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`and often did—take advantage of the advance knowledge by purchasing the Selected Security, in
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`advance of the promotion, and selling the Selected Security at inflated prices that resulted from
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`the promotion. Over the course of the ongoing scheme, all of the Primary Defendants, aided and
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`abetted by Knight, engaged in this conduct, participating directly in scalping and other deceptive
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`conduct, and all of the Defendants profited from the knowledge that others were doing so.
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`20.
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`The Primary Defendants deceptively promoted stocks through three channels:
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`stock-trading forums on Discord; podcasts; and Twitter.
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`21. Online stock-trading forums. In 2018, Defendants Matlock and Constantin
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`founded Atlas Trading (“Atlas”)—a free online forum that cultivated a following of novice stock
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`traders by purporting to provide educational content about trading and securities markets. Atlas
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`describes itself as “a team of consistent profitable traders who are willing to educate beginning
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`traders with free resources of education, free trading alerts and ideas.” Atlas is hosted on
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`Discord, a social media platform that offers users the ability to communicate via voice, video,
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`and text messaging, among other things. Matlock and Constantin are among a small group of
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`individuals who control the portion of the forum in which various Defendants recommended
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`specific stocks (the “SMALL CAPS trading floor”). Sub-forums such as the SMALL CAPS
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`trading floor are referred to as “channels” on Discord. Although anyone could view the content
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`on the SMALL CAPS trading floor channel, only individuals who are granted permission by the
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`small group of members that include Matlock and Constantin are permitted to post content there.
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`As Matlock explained, “the … [SMALL CAPS] trading floor is locked . . . to most. We kind of
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`reserve this channel for people who know more about stocks and have better information that
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`we’ve, you know, deemed worthy, I guess you could say, and they’ll discuss tickers in here . . .
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`during market hours, it’s more about calls and what’s going on with the market.” At various
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`times from 2018 to the present, Matlock and Constantin, along with Rybarcyzk, Deel,
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`Hennessey, Cooperman, and Knight, were allowed to post stock recommendations on the Atlas
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`SMALL CAPS trading floor. By early 2021, Atlas had more than 150,000 members.
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`22.
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`In 2018, Rybarcyzk founded Sapphire Trading (“Sapphire”), another stock-
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`trading forum on Discord. Sapphire featured a channel called the “pro-trader floor” that was
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`analogous to Atlas’s SMALL CAPS trading floor. In addition to Rybarcyzk, Defendants Deel
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`and Cooperman were permitted to post on Sapphire’s pro-trader floor. By mid-2021, Sapphire
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`had nearly 60,000 members.
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`23.
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`Podcasts. In July 2020, Knight and Hennessey launched a podcast called
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`“Pennies: Going in Raw” (“PGIR”). PGIR bills itself as an informational podcast “[d]iscussing
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`volume, price targets, penny stocks, accumulation, reverse splits and much more” and claims to
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`be the “#1 Stock Market Podcast in America” with over 2.3 million downloads. PGIR served as
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`a platform to promote Atlas and the Defendants, most of whom sat for multiple interviews with
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`Knight and Hennessey.
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`24.
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`Twitter. Each of the Defendants amassed substantial numbers of followers on
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`Twitter, where they regularly post about stocks they are manipulating. The term “FinTwit”
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`refers to the community of Twitter users that regularly tweet about finance and the stock market.
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`Defendants considered themselves influential within the FinTwit community. As Hennessey
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`remarked in a private Discord chat, “20 of us run fintwit an [sic] we have more money then [sic]
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`some countries.” The Defendants each included disclaimers on their Twitter accounts that they
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`were not providing stock recommendations or financial advice. But they intended for their
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`followers to act on their promotional tweets, and understood that their followers would do so.
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`Constantin, for example, acknowledged in an interview with Knight and Hennessey on PGIR: “I
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`understand that if I call something, you know, everybody and their mom is going to buy.” That
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`expectation is reflected in hundreds of tweets by the Defendants, including in the examples
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`below during the Relevant Period:
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`a. Rybarcyzk (“The Stock Sniper” / @Ultra_Calls): If you didn’t bank with the
`gang today; then idk what’s wrong. Gave this alert on Twitter and Sapphire
`Trading Discord (1000% FREE)
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`b. Cooperman (“Tommy Coops” / @ohheytommy): Hope everyone banked on
`this one. Did exactly what I said . Support entries and then NHOD [New High
`of the Day]. Didn’t wanna just keep talking about it <3  
`  
`c. Deel (“Mystic Mac” / @notoriousalerts): Alright Goblins I’m out for the day.
`EVERYONE should have banked with me on the initial $EXPR call at 5.15 or
`on the dip entry a second ago. Love you guys I’ll see you all tomorrow to
`make stupid money with you again!
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`d. Matlock (@PJ_Matlock): I’ll never get sick of pumping.... money into my
`followers bank accounts. LETS ALL GET RICH!
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`e. Hennessey (@Hugh_Henne): Every single member of atlas admin Have the
`same goal... to get as many people away from the 9-5 slavery and into the
`area of financial freedom and f u money. ❤ our gains but seeing stories of
`others paying off debt& banking is much more rewarding @MrZackMorris
`@PJ_Matlock
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`f. Knight (“Dan, Deity of Dips” / @DipDeity): Congrats to all the longs that
`banked with me on this one. I know I called it right as the market opened, but
`if you caught this one - you should be thanking me now
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`g. Hrvatin (@LadeBackk,): Next week I’m gonna have a nice one for us.
`Promise. I might even say something along the lines of… “Get in p*ssy, we’re
`going to the moon.”
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`25.
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`Defendants regularly promoted their own stock-trading success, and the
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`substantial wealth it brought them, along with the success of individuals who followed their
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`advice, in order to further their scheme and encourage their followers on social media to act on
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`their recommendations. For example:1
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`Hennessey:
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`a. On June 15, 2020, Hennessey tweeted: “6/15/2020: Decent day for the
`swings. Had to deal with something personal early this morning.. but working
`on a few new winners Had a blast w my boy @notoriousalerts An hour of
`bro’s, analogies and lessons! $1 MILLION in UNDER a YEAR Trading
`Stocks!!!”
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`b. On December 19, 2020, Hennessey tweeted: “ATLAS has the most self made
`millionaires We do not even know the names of the people that consider us
`their "competition" We are the '85 Bears. No one survives.”
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`c. On December 25, 2020, Hennessey tweeted: “Merry Christmas. Steps to
`financial freedom 1). Compound gains
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`@MrZackMorris [Constantin] $800 to what 15...20 mil in 3 years
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`@PJ_Matlock [Matlock] few k to MILLIONS
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`@notoriousalerts [Deel] $1,000 to 500ish k in 15 months
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`@DipDeity [Knight] $4,000 to 6 figures in a year
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`WE DID IT SO CAN YOU...”
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`Cooperman:
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`d. On April 4, 2021, Cooperman tweeted: “Get some sleep tonight gang.
`Tomorrow we continue the journey to you becoming a f*cking millionaire.
`BRING YOUR F*CKING SHOES!”
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`Hrvatin:
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`                                                            
`1 Throughout the Complaint, expletives have been redacted in part with asterisks from the
`original text. Tweets and Atlas posts are generally italicized but otherwise unchanged, with
`spelling/grammatical errors preserved.
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`Constantin is depicted in front of the Ferrari in the picture at left; Constantin,
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`Knight and a third individual (redacted in part) are depicted in front of the Ferrari
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`in the picture at right.
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`Rybarcyzk:
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`h. On November 22, 2021, Rybarcyzk tweeted: “I don’t want clout. I want my
`every single one of my followers to be millionaires.”
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`i. On December 29, 2021, Rybarcyzk tweeted: “I’m trying to hit 777
`millionaire traders 2022. I’m gonna make it happen. It’s not my goal to only
`make me prosper. I want all of you to prosper. I’m gonna make each and
`every one of you make it. The market is so universal. You just adapt to current
`conditions. Let’s go crazy.”
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`j. On July 26, 2021, Rybarcyzk tweeted:
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`Deel:
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`k. On July 16, 2021, Deel tweeted: “Actually 500 into 7Million, but who’s
`counting.”
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`l. October 29, 2021, Deel tweeted: “Bout 5K short of a million dollar month.
`Truly UN F*CKING REAL!!!! We will nail in on November I promise you
`that!!!! LETS GO!”
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`Tweets like those identified above served to further the scheme by convincing
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`26.
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`followers that acting on the Primary Defendants’ recommendations would likely lead to
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`significant wealth, and by falsely portraying their trading methods as accessible to anyone
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`willing to learn.
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`27.
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`As described above, defendants repeatedly sold shares in direct contradiction to
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`their public statements to followers on social media that they were continuing to buy, and or
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`holding their positions, in anticipation of higher share prices. This practice is called “dumping,”
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`and despite repeatedly dumping their stock as they recommended it to their followers, the
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`Primary Defendants reassured their followers and the general public that they did not engage in
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`such behavior, as illustrated by the false and misleading statements and posts below from the
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`Relevant Period:
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`
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`a. Constantin (Twitter): I don’t dump on people.
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`b. Constantin (PGIR Interview): I’m not going to like continue calling
`something just so, you know, we can get out. We take our losses, whatever,
`you move on.
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`c. Matlock (Twitter): And I’m not pumping and dumping on anyone. Why would
`I sell when I truly believe $RIBT gets over $1.50-$2. Haters mad to see
`anyone winning and come out if the stock is down 3% . All I post is
`information about it.
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`d. Deel (Twitter): $BCTX recap: I buy stocks that I think have a good chart and
`good news. That’s how I always play it and sometimes it goes the wrong way.
`That’s trading. I never dump shares on alerts. BCTX got smacked hard on a
`vwap reject and I took the L with you guys earlier. On to next
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`28.
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`e. Cooperman (Twitter): so we are CRYSTAL F*CKING CLEAR ... i dont dump
`on my followers. nor do i even have the following big enough to dump all my
`shares on. if i say i think something is going to do something THATS WHAT I
`THINK ITS GONNA DO.
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`f. Rybarcyzk (Twitter): You guys are my family. Whoever has my back is a real
`MVP. I’ve posted many negative P&L images. I don’t dump on anyone. If I
`have to I’ll just take my losses. I have diamond hands though.
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`These false and misleading statements furthered the Primary Defendants’ scheme
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`by building trust among their followers, so that the Primary Defendants could continue to
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`deceptively promote stocks, and continue to profit by selling their shares into the demand that
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`their promotion generated, all without disclosing either their plans to sell, or their actual sales.
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`29.
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`The Defendants understood that they were participating in an unlawful market-
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`manipulation scheme, and that they were profiting from misleading their followers. The
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`Defendants sometimes discussed their scheme over Discord voice chats that they believed were
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`private, but were being recorded. For example, on March 1, 2021, Knight and Cooperman
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`(along with others) discussed the group’s manipulation of the securities of GTT
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`Communications, Inc., which at the time traded on the New York Stock Exchange (“NYSE”)
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`under the ticker GTT.2 The following is a portion of the conversation:
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`Knight: Get caught? . . . We’re robbing f*cking idiots of their money. . .
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`Cooperman: It’s so funny because I can see the . . . . I can like see the timeline of these.
`Like I get it [the ticker], I send it to Dan [Knight]. I know Dan’s on voice. Dan tells you
`guys. I see it go up more. Then I send it to Gary [Deel] and I see it go up like way more
`[laughter] . . . . My other thing is too, is like alright, if we lose on one of these, we’ve
`won on like a hundred so . . . We gotta remember with these Ultra [Rybarcyzk] ones,
`they all do the same thing. It like spikes, comes down for a second—
`
`Knight: Then the scalpers get out, like Gary [Deel] gets out, then—
`
`                                                            
`2 The NYSE delisted GTT on August 2, 2021.
`
` 
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`Case 4:22-cv-04306 Document 1 Filed on 12/13/22 in TXSD Page 15 of 39
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`Cooperman: And then it goes f*cking bukoo, but no, that’s not only it. Like what he
`[Rybarcyzk] does is he alerts it, and then like five minutes later, all his little minions start
`like retweeting it and saying added with him, so it like builds the hype back up. It
`happens every single time. They have their shit down to a f*cking science, it’s crazy.
`Cooperman, Knight, and others were watching GTT’s stock price and volume in real time
`
`
`
`during that conversation. An unidentified individual exclaimed, “Wow, big dump!” Cooperman
`
`then commented that he understood that at least one of the Primary Defendants, Rybarcyzk, was
`
`dumping at that moment. He stated: “I can like see them in my head coming out of the candle.
`
`Like weee! [laughter] Weee!” Knight responded, “Another banger call guys,” referring to the
`
`promotion. Knight went on to make fun of Rybarcyzk’s followers who were losing money as
`
`Rybarcyzk’s share dump crashed the stock price: “And all his [Rybarcyzk’s] followers are like,
`
`‘Uh, yo we can’t sell today, I don’t have any day trades left.’”3 Knight’s mocking of
`
`Rybarcyzk’s followers elicited laughter. The group continued to mock Rybarcyzk’s followers.
`
`Playing the role of one of Rybarcyzk’s followers, Cooperman asked: “Is this a swing?” eliciting
`
`laughter. Knight continued, imitating Rybarcyzk’s followers: “Please be a swing.”
`
`30.
`
`In another surreptitiously recorded Discord call, on February 24, 2021, involving
`
`Knight, Cooperman, and others, Knight acknowledged that he understood the Primary
`
`Defendants were engaging in market manipulation, and explained why he posted fewer
`
`recommendations on Twitter and Atlas than the Primary Defendants:
`
`“[The less] I mention a stock, the less likely I get involved whenever all of
`Atlas gets a class action f*cking lawsuit . . . I’m playing this extremely
`smart, for the very long term. If you don’t think all these f*ckers go to jail
`or at least get sued, you are crazy. . . playing stupid does not work in
`court. . . it’s market manipulation. . . . I mean you look up the definition of
`market manipulation . . .”
`
`                                                            
`3 The Financial Industry Regulatory Authority imposes certain restrictions on the number of “day trades” allowed in
`certain types of accounts below certain asset thresholds.
`
` 
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`Case 4:22-cv-04306 Document 1 Filed on 12/13/22 in TXSD Page 16 of 39
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`31.
`
`Despite understanding that the Primary Defendants were engaging in market
`
`manipulation and profiting from misleading recommendations to their followers on Twitter,
`
`Atlas, and Sapphire, Knight continued to promote the Primary Defendants as expert traders on
`
`PGIR and provided them with a platform to peddle misleading statements about the stocks they
`
`were promoting. Knight himself profited from the fraud scheme by taking positions in the stocks
`
`that he knew the Primary Defendants were manipulating, and selling into the demand the
`
`Primary Defendants generated through the fraud scheme. Although Knight posted less
`
`frequently about the stocks, his role on the podcast was often to ask questions intended to elicit
`
`Hennessey or others to promote a stock.
`
`32.
`
`As noted, the Primary Defendants regularly trumpeted their trading successes to
`
`their followers. They held themselves out as stock picking experts worthy of the substantial
`
`followings they had amassed. But they also from time to time claimed they lost money on
`
`particular stock “plays.” Many of these claims of losses were false and designed to conceal the
`
`fact that the Primary Defendants had profited by dumping their shares into the demand their
`
`deceptive promotions had generated.
`
`33.
`
`For example, on August 11, 2021, Rybarcyzk claimed in a tweet that he lost
`
`money trading on ABVC Biopharma Inc. (NASDAQ: ABVC), which he had previously
`
`recommended to his followers:
`$ABVC Strange action today . Bag holder here 👋 honestly doesn’t make
`sense. Ran from $3.30 to $4.40’s yesterday and to $4.20’s today. But
`faded due to shorts and scalpers. I’m sure some made money. But I hold
`my word and don’t dump on anyone.
`
`Here, Rybarcyzk claimed that he lost money trading ABVC Biopharma (he was a “[b]ag
`
`holder”), and that others (including short sellers and “scalpers”) caused the share price to drop,
`
`but that he did not make money because he does not “dump” shares on anyone. But Rybarcyzk
`
` 
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`Case 4:22-cv-04306 Document 1 Filed on 12/13/22 in TXSD Page 17 of 39
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`actually made approximately $68,690 on August 10 and August 11, 2021 (the day he posted that
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`tweet) by dumping his shares while recommending ABVC to his followers.
`
`34.
`
`Similarly, on March 18, 2021, Deel, having promoted American Resources Corp.
`
`(Ticker: AREC) to his followers, claimed he lost $20,000:
`
`Deel (@notoriousalerts): “$AREC stopped me guys. Sorry about this one I lost
`20k here it looks like 1.5M shares were sold over 5. Sorry to anyone who took
`with me. Had great news this morning but didn’t wanna go. I’ll look for us a
`better one”
`In fact, Deel made more than $7,000 dumping his AREC shares on that day alone (and over
`
`$6,000 selling his shares into demand generated by his posts the day before).
`
`35.
`
`Others Primary Defendants also deceived their followers about profits and losses
`
`to further the scheme. Matlock, for example, having promoted FDS Pharma, Inc. (NASDAQ:
`
`HUGE) to followers, reported on Atlas on February 3, 2021: “HUGE I took the loss on it too.
`
`We will find a better one.” Matlock in fact made approximately $27,734 dumping his HUGE
`
`shares the day he made that post.
`
`II.
`
`Examples of Manipulation
`
`A.
`
`36.
`
`Camber Energy, Inc.
`
` Several Primary Defendants manipulated the stock of Camber Energy, Inc. at
`
`various times from August to October 2021. Camber Energy trades on the New York Stock
`
`Exchange under the ticker “CEI.” Deel, Matlock, and Cooperman established positions in CEI
`
`stock and sold into their deceptive promotion in early August 2021; Constantin and Hvartin
`
`established positions in the stock and sold into their deceptive promotion in September and
`
`October 2021. CEI was one of the Selected Stocks.
`
`August 3-5, 2021: Deel, Matlock, and Cooperman
`
`37. Matlock and Deel began purchasing shares of CEI on August 3, 2021.
`
` 
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`17
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`Case 4:22-cv-04306 Document 1 Filed on 12/13/22 in TXSD Page 18 of 39
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`Cooperman bought shares the next day. By the afternoon of August 4, 2021, all three had
`
`acquired significant positions in CEI, with Deel owning 936,422 shares acquired at an average
`
`price of $.46 per share, Matlock owning 835,429 shares acquired at an average price of $.46 per
`
`share, and Cooperman owning 405,000 shares acquired at an average price of $.47 per share.
`
`Then, at 3:37 p.m. Deel posted the following message about CEI on Twitter and on Atlas:
`
`$CEI I added for a swing. Volume is starting to come into pennies this
`week and this is very cheap. On the daily chart we have formed a double
`bottom. Last time it was at these prices we went to $3. So that leaves a lot
`of range.
`Matlock echoed the sentiment, posting on Atlas at 3:38 p.m.: “Adding CEI with you that's cheap
`
`AF,” using an abbreviation for the slang term cheap “as f*ck.”
`
`38. Within the next four minutes after those posts, Matlock sold 165,100 shares, Deel
`
`sold 60,000 shares, and Cooperman sold 240,000 shares of CEI, as the price rose by a penny per
`
`share. At 3:43 p.m., Deel, Matlock, and Cooperman posted about CEI a