logo
Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.
Brief Publisher Logo
FACT BRIEF

Is it illegal to spread false information to manipulate stock prices?

Tuesday, March 30, 2021
By Lauralei Singsank
Copy link
email
Copy featured image
email
YES

Social-media disinformation affecting financial markets has been addressed under securities laws. In 2015, the Securities and Exchange Commission warned the public about social media fraudsters working to manipulate the market, noting some recent actions it had initiated.

In one case arising in 2013, a Scottish man’s false tweets caused sharp drops in the stock prices of two companies. The case was settled in 2019, when he agreed to pay back profits and prejudgment interest totaling $217. (The SEC noted he may have mistimed his own transactions, limiting his profits.)

In another case, the commission charged a Canadian couple with using social media to boost stock prices on stocks they owned. The couple was fined $3.7 million, representing the profits they had made, plus $300,000 in penalties.

This fact brief is responsive to conversations such as this one.
Sources
US Securities and Exchange Commission Updated investor alert: Social media and investing—Stock rumors
US Securities and Exchange Commission False tweets sent two stocks reeling in market manipulation
US Securities and Exchange Commission Court enters final judgment against James Alan Craig
ABOUT THE CONTRIBUTOR
Gigafact
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
FACT BRIEF BY
Brief Publisher Logo
Latest fact briefs
facebook
twitter
email
email
About fact briefs published on Gigafact
Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.