A fast-food worker, Deyonte Jahtori Anthony, allegedly committed a $1 million fraud by duping his online broker into giving him $200,000 of advance credit, which he used to invest in stocks including Tesla, Nvidia, GameStop, and AMC Entertainment. Here’s a breakdown of the incident:
Anthony was a part-time worker at an Auntie Anne’s pretzel shop in North Carolina. He applied for a self-directed brokerage account, falsely claiming his annual earnings were between $25,000 and $50,000, while he actually earned around $400 a month.
He linked his trading account to a bank account with just 9 cents in it. He initiated unfunded deposits totaling $1 million between July 5 and 6, which granted him access to $200,000 in immediate credit.
On July 6, he used the credit to invest in eight stocks and an exchange-traded fund (ETF). He put around $85,000 into Apple, $78,000 into GameStop, $22,000 into Nvidia, $13,000 into AMC Entertainment, and $700 into Tesla, among others.
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GameStop and AMC Entertainment were “meme stocks” that gained popularity due to retail investor interest. Tesla and Nvidia are companies with enthusiastic fan bases and high growth potential.
The broker discovered Anthony’s fraudulent activity the following day, froze his account, and liquidated his holdings. Despite the short-lived investments, the broker made a profit of about $7,000, including returns from GameStop, Apple, and Nvidia.
Anthony’s deposits were reversed due to insufficient funds. He was fired from his job at Auntie Anne’s and admitted to making the deposits and misleading his broker during investigative testimony.
The Securities and Exchange Commission (SEC) has filed a complaint seeking to ban Anthony from trading securities without sufficient funds and force him to disclose the incident if he opens a brokerage account in the future.
Anthony attempted a “free-riding” scheme, where a trader makes false deposits to access credit, aims to make profits, and withdraws the funds before the broker discovers the fraud.
The case highlights the risks of fraudulent activities and the importance of maintaining integrity in financial transactions.
