A pretzel-shop employee orchestrates a $1 million fraud for Tesla, AMC, GameStop, and Nvidia stocks, resulting in a $7,000 gain for the broker, according to the SEC.

All of the money was invested by the Auntie Anne's employee in Tesla, Nvidia, GameStop, AMC, and other stocks.

A pretzel-shop employee orchestrates a $1 million fraud for Tesla, AMC, GameStop, and Nvidia stocks, resulting in a $7,000 gain for the broker, according to the SEC.

According to the Securities and Exchange Commission, an online broker was deceived by a fast-food worker who managed to obtain $200,000 in advance credit. Subsequently, the worker invested these fraudulent funds in stocks such as Tesla, Nvidia, GameStop, and AMC Entertainment.

In the summer of last year, Deyonte Jahtori Anthony, aged 23, held a part-time position at an Auntie Anne's in North Carolina. According to a complaint filed by the SEC on August 25, Anthony applied for a self-directed brokerage account on July 1. He allegedly misrepresented his income, stating an annual earnings range of $25,000 to $50,000 when he was actually earning approximately $400 per month.

Anthony connected his trading account to a bank account holding a mere 9 cents, and subsequently initiated unfunded deposits totaling $1 million on July 5 and 6. As a result of these pending deposits, he gained access to immediate credit of $200,000, which he promptly invested in eight stocks and an exchange-traded fund on July 6, as disclosed by the SEC.

The employee from the pretzel shop allocated roughly $85,000 to Apple, $78,000 to GameStop, $22,000 to Nvidia, $13,000 to AMC Entertainment, and $700 to Tesla. Additionally, he distributed another $800 across Cano Health, Electronic Arts, Resolute Forest Products, and ETFMG Prime Cyber Security, according to information from the SEC.

The broker uncovered Anthony's alleged deception the following day, promptly froze his account, and liquidated his entire portfolio. Surprisingly, these short-lived investments turned out to be profitable; the broker managed to secure around $7,000 in profit, which included approximately $4,700 from GameStop, $1,600 from Apple, and $800 from Nvidia. As per the SEC complaint, nearly all of Anthony's trades were in the green when the broker decided to cash out.

Anthony was unable to make any withdrawals before his account was frozen. His deposits were later reversed due to insufficient funds, and he faced employment consequences, being terminated from Auntie Anne's on July 9 for failing to report for work. Furthermore, during investigative testimony, he confessed to making the deposits and providing false information to his broker under oath, according to regulatory authorities.

In response to inquiries about why he initiated the $1 million in unfunded deposits without adequate funds to cover them, Anthony justified his actions as "a joke" and claimed he "never truly considered it as fraudulent," as stated by the SEC.

Anthony attempted to carry out a "free-riding" scheme, a tactic in which a trader initiates deceptive deposits to gain access to extended credit, with the intention of profiting and withdrawing the funds before their broker detects the fraud and freezes the account. This explanation was provided by the federal agency.

The SEC, in its complaint, expressed its intention to prohibit Anthony from engaging in securities trading without adequate funds in his account and to compel him to disclose this incident should he choose to open a brokerage account in the future.

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