Indictment of seven individuals charged in wide-scale $114 million social media-based securities fraud case in the Southern District of Texas was dismissed just one week before opening statements
When a group of retail traders were indicted in December 2022 for allegedly engaging in nearly 400 social media-based pump and dump schemes, the case made national news. The case was even featured (or mocked) on the Daily Show. The facts alleged by the government seemed almost insurmountable - traders touting stocks online only to sell those same stocks when their followers bought the stocks based on the hype. But Eric found a path to victory.
In early 2023, the Supreme Court released an instrumental Supreme Court case (Ciminelli) that rejected the “right to control” theory of wire and mail fraud. Eric quickly recognized that the traders had also been indicted under a similar theory to the right to control species of fraud. The traders, allegedly, had deprived their Twitter followers of the knowledge necessary to make an informed discretionary economic decision. But under Ciminelli, that was not a crime. For months, Eric pushed the Court to recognize the true defects in the government’s indictment, and on the eve of trial, the court did just that, dismissing the entire indictment against all the defendants.
