In a daring financial escapade, a fast-food worker managed to secure $200,000 of advance credit by making fraudulent deposits, the Securities and Exchange Commission (SEC) reports. 23-year-old Deyonte Jahtori Anthony, a part-time employee at an Auntie Anne’s in North Carolina, duped his online broker and invested the entire sum into a selection of high-profile stocks, including Tesla, Nvidia, GameStop, and AMC Entertainment. In a twist of irony, the broker managed to turn a profit of roughly $7,000 when the holdings were liquidated a day later upon discovering the alleged fraud.
Anthony’s audacious scheme unfolded last summer when he applied for a self-directed brokerage account, grossly inflating his income on the application. He then linked his trading account to a near-empty bank account and initiated unfunded deposits totaling $1 million. This granted him access to $200,000 in immediate credit, which he swiftly invested across eight stocks and an exchange-traded fund. The stocks included meme stocks GameStop and AMC, which saw dramatic price increases earlier in 2021 due to mass purchasing by retail investors, and tech giants Tesla and Nvidia, whose stock prices have skyrocketed due to the growing artificial intelligence revolution.
Fast-Food Worker’s High-Stakes Stock Bet
In an unexpected financial gambit, a part-time fast-food worker allegedly secured $200,000 of advance credit through fraudulent means and promptly invested the entirety into major stocks such as Tesla, Nvidia, GameStop, and AMC Entertainment, the Securities and Exchange Commission (SEC) reports. However, his broker caught on to the scheme a day later, liquidating his holdings and making a profit of approximately $7,000.
Skyrocketing Funds on a Pretzel-Shop Salary
Deyonte Jahtori Anthony, a 23-year-old employee of Auntie Anne’s in North Carolina, falsely claimed to earn between $25,000 and $50,000 a year on a $400 a month salary when he applied for a self-directed brokerage account on July 1. With only 9 cents in his linked bank account, Anthony initiated unfunded deposits totaling $1 million on July 5 and 6. This resulted in an instant credit of $200,000 which he immediately invested into various stocks and an exchange-traded fund on July 6, according to the SEC.
Bet on Meme Stocks and Tech Giants
Anthony’s investment choices were an interesting mix. Around $85,000 went into Apple, $78,000 into GameStop, $22,000 into Nvidia, $13,000 into AMC Entertainment, and $700 into Tesla. The remaining $800 was spread across Cano Health, Electronic Arts, Resolute Forest Products, and ETFMG Prime Cyber Security. GameStop and AMC, known as "meme stocks", were extremely popular among retail investors earlier this year, while Tesla and Nvidia have a dedicated fanbase expecting big returns from the artificial-intelligence revolution.
Broker Catches On
However, Anthony’s alleged fraud was discovered the very next day. His account was frozen and all his holdings were liquidated. Despite the short-lived nature of the purchases, the broker managed to make a $7,000 profit, with returns of approximately $4,700 from GameStop, $1,600 from Apple, and $800 from Nvidia. Anthony, who was unable to withdraw any money before his account was frozen, lost his job at Auntie Anne’s on July 9 and later admitted to misleading his broker under oath.
Anthony’s actions are an example of a "free-riding" scheme, where an individual makes illegitimate deposits to gain access to advance credit, hoping to make a profit and withdraw funds before being caught. The SEC is now seeking to ban Anthony from trading securities without sufficient funds and require him to disclose this incident if he opens a brokerage account in the future.
Takeaways: The allure of the stock market has led to some attempting to game the system, as seen in Anthony’s case. This incident serves as a reminder that regulatory bodies like the SEC are vigilant in their efforts to maintain fair and transparent trading practices. While the promise of quick profits might be tempting, it’s crucial to approach investments responsibly and ethically.