LOS ANGELES
A federal grand jury has returned an indictment charging a San Pedro man in a “stock scalping” scheme in which he used his “TeamBillionaire” email list and his social media accounts to deceive investors into buying penny stocks he recommended while simultaneously selling off those same stocks for a profit, officials stated.
Michael M. Beck, 48, was charged in an indictment returned Tuesday afternoon with three counts of securities fraud and three counts of wire fraud, each carrying a statutory maximum penalty of 20 years in federal prison, officials allege.
The indictment alleges that Beck purchased blocks of penny stocks and then promoted those stocks to his many followers on the social media platform then known as Twitter.
Before promoting the stocks to the followers of the @BigMoneyMike6 handle on Twitter, Beck encouraged subscribers of his TeamBillionaire email group to buy th
e stock, thereby increasing the stock’s trading volume and making the stock look more attractive to potential investors.
At the same time, Beck was secretly selling—or causing his associates to sell—shares of the very stock he was promoting into the artificially inflated market for a profit, often while falsely telling his Twitter followers that he was still buying shares.
Investigators believe that Beck’s fraudulent scheme resulted in profits of at least $500,000.
The U.S. Securities and Exchange Commission filed a civil complaint alleging that Beck committed violations of federal securities law. The defendant is presumed innocent unless proven guilty.
IRS Criminal Investigation is investigating the case.
Assistant U.S. Attorneys Carolyn S. Small and Jenna Williams of the Corporate and Securities Fraud Strike Force are prosecuting this case.