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SEC Charges a Former CEO with Making False Statements Through an Anonymous Social Media Account

Late last month, the U.S. Securities and Exchange Commission (SEC) charged the CEO of a public company with making false and misleading statements on social media about the company’s performance in an attempt to boost the company’s stock price. Although some of the allegedly misleading statements were made in the company's public disclosures, a number of the statements were made through an account on Stockwits, a social media platform, that used a pseudonym and was not tied to the company.

Its not clear how the SEC determined that this account was related to the company's CEO, but it is a good reminder that the SEC does monitor social media and has the ability to potentially tie anonymous social media accounts to the underlying owner. Even innocuous posts can be viewed as being made for some nefarious purpose by the SEC if not made through official channels. Public company executives should never post anonymously and insure that all communications are reviewed internally and by outside counsel if necessary prior to their being posted.

SEC Charges Former Alfi CEO Paul Pereira with Fraud for Making False Statements on Social Media


corporate, corporate governance, corporate & finance, capital markets