SEC v. FRANCIS SABO, No. 4:23-cv-01935, Southern District of Texas (May 26, 2023) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS

SECURITIES AND EXCHANGE COMMISSION,

    Plaintiff,
            v.

FRANCIS SABO, a/k/a “RICKY BOBBY,”

                                                    Defendant.

Civil Action No. 22-CV-____ (___)

JURY TRIAL DEMANDED

COMPLAINT
 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
following against the defendant:
SUMMARY
1. Francis Sabo promoted himself as a trustworthy stock-picking guru.  In reality, he
was a seasoned stock manipulator.  Working with several other individuals involved in an
expansive stock-manipulation scheme, he identified stocks ripe for manipulation, acquired
substantial positions in these securities, and then recommended these stocks as good investments
to followers in an online stock-trading forum he moderated with other participants in the scheme.
He encouraged members of the stock-trading forum to purchase the selected stocks, often
claiming that he too had bought or intended to buy these stocks for himself and that he intended
to hold them.  Instead, he sold his shares into the demand generated by his own deceptive
promotions and the deceptive promotions of other participants in the scheme.
1

                                                            
1
  The Commission previously charged eight other participants in the scheme:  Edward
Constantin, Perry Matlock, Thomas Cooperman, Gary Deel, Mitchell Hennessey, Stefan Hrvatin,
Daniel Knight, and John Rybarczyk.  All but Knight were charged with violations of Section
17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-

2
 
2. From at least January 2020 through December 2022 (the “Relevant Period”), Sabo
generated more than one million dollars in illicit proceeds from his participation in this stock-
manipulation scheme.
VIOLATIONS
3. As a result of the conduct alleged herein, defendant Sabo violated, and unless
restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933
(“Securities Act”) [15 U.S.C. §77q(a)], Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. §78j(b)], and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5(a), (b)
& (c)].
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
4. The Commission seeks a permanent injunction against the Defendant, enjoining
him from engaging in transactions, acts, practices, and courses of business of the type alleged in
this Complaint; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this
Complaint, together with prejudgment interest; civil penalties pursuant to Section 20(d) of the
Securities Act [15 U.S.C. §77t(d)] and/or Section 21(d)(3) of the Exchange Act [15 U.S.C.
§78u(d)(3)]; and such other relief as the Court may deem appropriate.
JURISDICTION AND VENUE
5. This Court has jurisdiction over this action pursuant to Section 22(a) of the
Securities Act [15 U.S.C. §77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15
U.S.C. §§78u(d), 78u(e), and 78aa].
6. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.
                                                            
5 thereunder.  Knight was charged with aiding and abetting the other defendants’ violations.  See
S.E.C. v. Constantin et al., No. 22-cv-4306 (S.D. Tex. 2022).

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§77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa].  Certain of the acts, practices,
transactions and courses of business alleged in this Complaint occurred within the Southern
District of Texas, and were effected, directly or indirectly, by making use of means or
instrumentalities of transportation or communication in interstate commerce, or the mails.  In
furtherance of the fraud scheme, Sabo communicated with other scheme participants who resided
in the Southern District of Texas.
DEFENDANT
7. Francis Sabo, a/k/a “Ricky Bobby,” 38, is a resident of Troy, Michigan.  Sabo
was a member of Atlas Trading, a stock-trading forum on the social media platform Discord,
which offers users the ability to communicate via voice calls, video calls, and text messaging,
among other things.
RELATED INDIVIDUALS
8. Edward Constantin, a/k/a “MrZackMorris,” a/k/a “Edward Constantinescu,” 38, is
a resident of Houston, Texas.  His Twitter account, @MrZackMorris, had more than 551,000
followers as of December 2022.  Constantin was a co-founder of Atlas Trading.
9. Perry Matlock, a/k/a “PJ Matlock,” age 39, is a resident of The Woodlands,
Texas.  His Twitter account, @PJ_Matlock, had more than 340,000 followers as of December
2022.  Matlock referred to himself as the “CEO” and co-founder of Atlas Trading.
10. Thomas Cooperman, a/k/a “Tommy Coops,” 35, is a resident of Beverly Hills,
California.  His Twitter account, @ohheytommy, had more than 129,000 followers as of
December 2022.  During the relevant period, Cooperman was a member of the electronic music
group Breathe Carolina and, with Gary Deel, ran a YouTube channel called the “Goblin Gang,”
described as “[t]wo multi-millionaire day traders filming their lives for the internet to see.”

4
 
11. Gary Deel, a/k/a “Mystic Mac,” 28, is a resident of Beverly Hills, California.  His
Twitter account, @notoriousalerts, had approximately 144,000 followers as of December 2022.
With Cooperman, Deel ran the Goblin Gang YouTube channel during the Relevant Period.
12. Mitchell Hennessey, a/k/a “Hugh Henne,” 24, is a resident of West New York,
New Jersey.  Along with Daniel Knight, Hennessey hosted the “Pennies:  Going in Raw” podcast
during the Relevant Period, which promoted Atlas Trading.  His Twitter account,
@Hugh_Henne, had more than 237,000 followers as of December 2022.
13. Stefan Hrvatin, a/k/a “LadeBackk,” 36, is a resident of Miami, Florida.  His
Twitter account, @LadeBackk, had more than 150,000 followers as of December 2022.
14. Daniel Knight, a/k/a “Deity of Dips,” 28, is a resident of Houston, Texas.  With
Hennessey, Knight was a co-host of the “Pennies:  Going in Raw” podcast during the Relevant
Period.  His Twitter account, @DipDeity, had more than 171,000 followers as of December
2022.
15. John Rybarczyk, a/k/a “Ultra Calls,” a/k/a “The Stock Sniper,” 32, is a resident of
Spring, Texas.  His Twitter account, @Ultra_Calls, had more than 267,000 followers as of
December 2022.  Rybarczyk was the founder of Sapphire Trading, another stock trading forum
on Discord.
16. Defendant Sabo, along with Constantin, Matlock, Cooperman, Deel, Hennessey,
Hrvatin, and Rybarczyk, are sometimes collectively referred to herein as the “Scheme
Participants.”  Knight aided and abetted the Scheme Participants.
FACTS

I. SUMMARY OF SCHEME
17. Sabo and others engaged in a long-running fraudulent scheme sometimes referred

5
 
to as “scalping,” in which they recommended the purchase of a particular stock without
disclosing their intent to sell that stock.  They generally executed their scheme in three phases.
First, Sabo and/or one of the other Scheme Participants identified a security to manipulate (the
“Selected Stock”) and purchased shares of that particular security.  By sharing the name of the
Selected Stock among some or all Scheme Participants, Sabo and his co-schemers provided each
other with the opportunity to purchase shares at lower prices prior to the manipulation.  Next,
Sabo and others promoted the stock to their followers.  Sabo primarily promoted the Selected
Stocks in an online stock trading forum of which he was a moderator.  Other participants
promoted the Selected Stocks on that forum, on podcasts, and/or other social media platforms
such as Twitter in order to generate demand and inflate the share prices of the Selected Stock.
Sabo and other Scheme Participants typically announced price targets, teased upcoming news
about the company, and/or stated their intention to buy shares or hold their current positions for
longer periods.  Often these announcements took the form of stock “alerts.”  Some Scheme
Participants also posted materially false information about the stocks in podcasts and social
media.  Finally, after promoting the stock to their followers in these ways, the Scheme
Participants, including Sabo, sold their shares into the demand generated by their
recommendations.  When the scheme succeeded, Scheme Participants, including Sabo, were able
to sell their shares at higher prices and make profits.  In order to cover up their scheme and
continue perpetrating it, Sabo and the Scheme Participants at various points deleted old tweets
and chats, and lied to their followers about the reasons why particular stock picks were followed
by declines in the prices of those stocks, obscuring their own roles in causing losses among their
followers and other retail investors.
18. Like other Scheme Participants, Sabo did not disclose that he was either planning

6
 
to sell, or was actively selling, a Selected Stock while recommending that his followers buy it.
Nor did Sabo disclose that he was coordinating with other members of the scheme to manipulate
the price and volume of trading in the stocks they were promoting.
19. Scheme Participants’ specific roles in the fraudulent scheme varied depending on
the timeframe and the specific security at issue.  Typically, only a subset of Scheme Participants
helped manipulate the price of a particular stock.  Those individuals would agree on a Selected
Stock in which they would each establish a position (i.e., “load” or “load up” on the stock).
After loading up on the Selected Stock, most, if not all, of the Scheme Participants who had
established positions in that stock would recommend it to their followers.  The Scheme
Participants often referred to “swinging” or taking a “swing” position in the stock, by which they
conveyed to their followers that they intended to hold onto the stock for at least a day, and likely
longer.  The Scheme Participants involved in the deceptive promotion of a particular stock often
informed other Scheme Participants of their plans.  As a result, those not directly promoting the
stock could—and often did—take advantage of the advance knowledge by purchasing the
Selected Stock, in advance of the promotion, and selling the Selected Stock at inflated prices that
resulted from the promotion.  During the Relevant Period, all of the Scheme Participants, aided
and abetted by Knight, engaged in this conduct, including scalping and other deceptive conduct,
and all of the Scheme Participants profited from the knowledge that others were doing so.
20. Sabo deceptively promoted stocks primarily through an online stock trading
forum, “Atlas Trading,” which was hosted on the social media platform Discord.  Other Scheme
Participants deceptively promoted stocked through both Atlas Trading and Twitter, among other
platforms.
21. Atlas Trading.   In 2018, Scheme Participants Matlock and Constantin founded

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Atlas Trading (“Atlas”)—a free online forum that cultivated a following of novice stock traders
by purporting to provide educational content about trading and securities markets.  Atlas
described itself as “a team of consistent profitable traders who are willing to educate beginning
traders with free resources of education, free trading alerts and ideas.”  Atlas was hosted on
Discord, a social media platform that offers users the ability to communicate via voice, video,
and text messaging, among other things.  Matlock and Constantin were among a small group of
individuals who controlled the portion of the forum in which various Scheme Participants,
including Sabo, recommended specific stocks (the “SMALL CAPS trading floor”).  Sub-forums
such as the SMALL CAPS trading floor are referred to as “channels” on Discord.  Although
anyone could view the content on the SMALL CAPS trading floor channel, only certain
individuals, including Sabo, were granted permission to post content there.  As Matlock
explained, “the ... [SMALL CAPS] trading floor is locked . . . to most.  We kind of reserve this
channel for people who know more about stocks and have better information that we’ve, you
know, deemed worthy, I guess you could say, and they’ll discuss tickers in here . . . during
market hours, it’s more about calls and what’s going on with the market.”  At various times from
2018 to the present, Matlock and Constantin, along with Sabo, Rybarczyk, Deel, Hennessey,
Cooperman, and Knight, were allowed to post stock recommendations on the Atlas SMALL
CAPS trading floor.   By early 2021, Atlas had more than 150,000 members.
22. Twitter.  Each of the Scheme Participants amassed substantial numbers of
followers on Twitter, where most of them regularly posted about stocks they were manipulating.
The term “FinTwit” refers to the community of Twitter users that regularly tweet about finance
and the stock market.  The Scheme Participants considered themselves influential within the
FinTwit community.  As Hennessey remarked in a private Discord chat, “20 of us run fintwit an

8
 
[sic] we have more money then [sic] some countries.”   Scheme Participants included disclaimers
on their Twitter accounts that they were not providing stock recommendations or financial
advice.  But they intended for their followers to act on their promotional tweets, and understood
that their followers would do so.
23. As described above, Sabo and other Scheme Participants repeatedly sold shares in
direct contradiction to their public statements to followers on social media that they were
continuing to buy, and/or holding their positions, in anticipation of higher share prices.  This
practice is called “dumping,” and despite repeatedly dumping their stock as they recommended it
to their followers, the Scheme Participants reassured their followers and the general public that
they did not engage in such behavior.
24. These false and misleading statements furthered the stock manipulation scheme
by building trust among their followers, so that the Scheme Participants could continue to
deceptively promote stocks, and continue to profit by selling their shares into the demand that
their promotion generated, all without disclosing either their plans to sell, or their actual sales.
25. Sabo understood that he was participating in an unlawful market-manipulation
scheme, and that he and other Scheme Participants were profiting from misleading their
followers and other members of Atlas Trading.  Sabo and other Scheme Participants discussed
the scheme in private messages.  For example, on July 8, 2020, Sabo sent a private Discord
message to Matlock:
hey the patterns is becoming to obvious with Atlas..  quickly
gonna become exposed like the stocktwits pump bros . . . Hugh
[Hennessey]/Mystic [Deel] post an idea ... .2 mins later the

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other one joins!  Incbob posts a swing idea . . . 2 mins later PJ
[Matlock] joins!  we cant do it on 95% of the plays
2

Here, Sabo recognized that pump-and-dumps conducted by the Scheme Participants were
becoming frequent and obvious, putting the scheme itself—which relied on the trust of Scheme
Participants’ followers—at risk.
26. Sabo returned to this theme in chats with Matlock in May 2021, having
participated in the manipulation of numerous stocks in the interim.  Sabo sent Matlock a private
Discord chat stating:  “we’re gtting a reputation and its becoming super obvious.  to the point
that i dont blame people shorting us. . .  its the main reason i started posting more, to drowned
out there obvious pump and dump plays.”  A few days later, Sabo told Matlock in a private
Discord chat that Atlas “went from the teaching/room that has a pulse on the entire market to
just out right pumping.”
27. As noted, the Scheme Participants regularly trumpeted their trading successes to
their followers.  They held themselves out as stock-picking experts worthy of the substantial
followings they had amassed.  But they also from time to time claimed they lost money on
particular stock “plays.”  Many of these claims of losses were false and designed to conceal the
fact that the Scheme Participants had profited by dumping their shares into the demand their
deceptive promotions had generated.
28. Sabo and other Scheme Participants took further steps to hide their scheme from
their followers as well as from regulators and law enforcement.  Among other things, Sabo and
other Scheme Participants deleted private chats and social media posts they thought might
                                                            
2
 Tweets and Atlas posts are generally italicized but otherwise unchanged, with
spelling/grammatical errors preserved.  Throughout the Complaint, expletives in the original text
have been redacted in part with asterisks.

10
 
implicate them in violations of the securities laws.
29. For example, on January 14, 2020, Sabo asked Matlock in a private Discord chat:
“btw how did u delete our chat history?  i want to do that lo.”   Matlock replied:  “Oh I have a
script for it I’ll send it to you . . . So there isn’t a bot that can delete chats and delete messages.
But I wrote something that you can inject into discord and it just wipes sh*t lol.”
30. Similarly, on December 11, 2020, Sabo told Matlock:  “hey i went through all my
old tweets and deleted anything with the word advice, just to be safe . . .”   Sabo included a link
to a query of Matlock’s tweets for the term “advice.”   Matlock thanked Sabo and confirmed he
had deleted such tweets as well.
II. Examples of Manipulation
A. Regulus Therapeutics, Inc.
31. On June 12, 2020, Scheme Participants informed each other that they intended to
promote Regulus Therapeutics (NASDAQ:  RGLS) that day.  Beginning at 8:38 a.m., Matlock
and Sabo exchanged a series of private messages:
 Matlock:  Hugh [Mitchell Hennessey] posting RGLS at 10am don’t tell
anyone though just so you know
 Sabo:  that f*cker
 Sabo:   I sold my .86 entry
3

 Sabo: lol
 Sabo:  thanks tho
 Sabo:  ill take some again

32. Knowing that Hennessey planned to recommend RGLS to his followers at 10:00
a.m., Sabo soon began buying RGLS shares.  Between 9:25 and 10:02 a.m., Sabo bought 45,403
                                                            
3
 The day before (June 11, 2020), Sabo had purchased 64,805 RGLS shares for prices ranging
from $.83 to $.86 per share.  He sold the entire position the same day, June 11, 2020, at prices
ranging from $.86 to $.89 per share.

11
 
RGLS shares at prices between $.86 and $.92 per share.  Several of the other Scheme
Participants had also established positions in RGLS before Hennessey’s posts.  Specifically,
Hennessey held 150,043 RGLS shares; Constantin held 147,657 RGLS shares; Rybarczyk held
102,412 RGLS shares; Matlock held 28,000 RGLS shares; Gary Deel held 3,900 RGLS shares;
and Knight held 3,395 RGLS shares.
33. At 10:02 a.m., Hennessey sent a series of tweets recommending RGLS to his
followers.  The tweets included the following:
$RGLS
Catalyst:  “The Company expects to complete this study in mid-2020 with topline
results available”.

They have a shareholder meeting june 17th I EXPECT data right after.
[Image from RGLS press release on clinical trial]
I expect this RIGHT after JUNE 17th shareholder meeting
So data should be here within the week  @buysellshort  find: RGLS is an
infectious disease phase... covid”

34. One minute later, at 10:03 a.m., Sabo sold 10,400 RGLS shares at $.92 per share;
Deel sold 3,900 RGLS shares at $.92 per share; and Knight sold 200 RGLS shares at $.93 per
share.
35. While Sabo, Deel, and Knight were selling, Hennessy continued tweeting at 10:03
a.m.:
$RGLS chart

speaks for itself

Beautiful weekly, starting to curl. Any good news sends

$RGLS

Catalyst... after June 17th Shareholder meeting

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Expected to be good (if good merger deal will likely close)
Chart (breaks out over 1)
Covid angle PR
Undervalued.. no more to say

PT: over $1 today 1.45 – 1.75 then if data is good easily $2

36. Also at 10:03 a.m., Rybarczyk tweeted:  $RGLS LONG!!!
37. A minute later, Sabo sold another 10,000 RGLS shares for $.96 per share;
Matlock sold 10,500 RGLS shares for $.96 per share; and Knight sold 200 RGLS shares for $.97
per share.  At 10:05 a.m., Sabo sold another 25,003 RGLS shares, and Matlock and Rybarczyk
sold another 1,000 and 22,412 RGLS shares, respectively, all for $.94 per share.  Shortly after
sending a flurry to tweets recommending RGLS to his followers, Hennessey sold all 150,043 of
his shares for $.90 to $.97 per share.
B. Camber Energy, Inc.
38.  Camber Energy, Inc. trades on the New York Stock Exchange under the ticker
“CEI.”  Several Scheme Participants manipulated the price of stock of CEI at various times
during the Relevant Period.  For example, Deel, Matlock, and Cooperman established positions
in CEI stock and sold into their deceptive promotion in early August 2021; Sabo, Constantin, and
Hrvatin established positions in the stock and sold into their deceptive promotion in September
and October 2021.
September 1 - October 5, 2021:  Sabo, Constantin, and Hrvatin
39. On September 1, 2021, between 1:42 and 1:47 p.m., Constantin bought 2,000,000
shares of CEI at prices between $.49 and $.51.  Constantin then began posting price targets and
memes about CEI in an effort to boost the stock’s price and trading volume.  During the same
period, Hrvatin purchased CEI shares, posted price targets, and then sold his entire position on
multiple occasions.  What follows are examples of Sabo’s, Constantin’s and Hrvatin’s purchases,

13
 
posts, and sales.
40. On September 1, 2021, at 1:58 p.m., Constantin tweeted:  “$CEI average .51
swinging with @LadeBackk [Hrvatin] for $2+. Don’t give us crap if it hits $1 and you don’t
sell. Your body, your choice. I like this stock.”  The next morning, at 9:30 a.m., Hrvatin bought
100,000 CEI shares for $.69 per share, while announcing a $1 price target for CEI on Twitter:
“$CEI let the $1 run begin.”  Two minutes after that tweet, Hrvatin dumped all of his shares for
$.72 per share.
41. On September 3, 2021, Constantin tweeted:  “My homie @LadeBackk [Hrvatin]
holding with me. $3-5.”  On September 13, 2021, Constantin tweeted a price target of $3 to $5
for CEI and encouraged his followers to hold onto the stock: “$CEI $3-5+.  Too many of you act
like little bitches when there’s dips. It’s all part of the game.”
42. On September 15, 2021, Hrvatin bought 100,000 CEI shares at $1.65 per share.
At 3:31 p.m., two minutes after he bought the shares, he tweeted:  “$CEI I’m holding overnight.
A huge day is coming. I can feel it.”  Within minutes, Constantin responded to Hrvatin’s tweet:
“I ain’t selling under 3 beleed that.”  Meanwhile, Hrvatin—despite telling his followers he was
“holding overnight” because a “huge day is coming”—had already begun to dump all 100,000 of
his shares for $1.66 per share between 3:34 and 3:36 p.m.
43. On September 17, 2021, between 11:50 and 11:51 a.m., Sabo purchased 75,000
CEI shares for $1.75 per share.
44. Sabo then immediately posted on Atlas Trading:  “CEI going for nhod [new high
of the day].”
45. The next minute, Sabo began dumping his CEI shares, selling 50,000 shares for
$1.76 per share and 25,000 CEI shares for $1.75 per share.  By 11:53 a.m., he had liquidated all

14
 
of his CEI shares.
C. Torchlight Energy Resources
46.  On or about February 9, 2021, Hennessey identified Torchlight Energy
Resources (NASDAQ: TRCH) as a Selected Stock.
4
  On the morning of February 10, 2021,
between 7:00 a.m. and 10:10 a.m., Hennessey, Sabo, Matlock, Deel, and Knight (“the TRCH
Participants”) purchased TRCH shares in the following amounts:  Hennessey (196,019), Matlock
(383,421), Deel (210,000, net), Rybarczyk (198,907), Sabo (50,000), Knight (8,562, net).  The
price of the shares ranged from $1.68 to $1.95 per share.
47. After purchasing the vast majority of their shares, the TRCH Participants engaged
in a campaign to raise the price of the stock, falsely claiming that they were holding their shares,
while selling them to realize profits.  Knight aided and abetted the scheme, by, among other
things, providing them with a platform, the “Pennies: Going in Raw” podcast, to promote
specific stocks and recommend specific stock purchases to listeners.
5

48. In the course of the scheme, various participants often highlighted an anticipated
event that would purportedly raise the stock price (a “catalyst”) and encouraged buying and
holding the stock until the event, falsely claiming that they too were holding the stock waiting
for the catalyst.  In the case of TRCH, the catalyst was a purported upcoming merger with
another company, Metamaterial Inc.  Hennessey claimed that he had discovered that this merger
                                                            
4
 The company became Meta Materials Inc. (Ticker: MMAT) following a merger.
5
 Sabo knew that this podcast and its hosts were recommending stocks and providing financial
advice to listeners.  For example, in a private Discord chat with Matlock from January 2021,
Sabo stated “the whole PGIR [“Pennies:  Going in Raw”] thing is great, i love the guys, but we
might need to start to distance ourselves a little from them unless they cool it down.  Hugh
[Hennessey] is technically giving financial advice, which is not legal, way too freely. Them
going on all these shows and what not, bringing way too much heat as well. Something to be
weary of going forward.”

15
 
was coming in the course of his due diligence (“dd”) research on the company.  Hennessey
repeatedly promoted false information about Metamaterial itself (e.g., that it was worth “north of
$4.8 billion”) and promoted the purported benefits of the merger.  Hennessey also posted about
other purported long-term benefits to TRCH stock holders, including a “dividend” that TRCH
shareholders would purportedly receive after the merger.  Hennessey also claimed that
Metamaterial was potentially partnering with Tesla, and that Metamaterial had products that had
applications for fighting COVID-19 and thus a “10 billion dollar MARKET CAP POTENTIAL.”
49. Specifically, in the first round of manipulation, on February 10, 2021, from 10:11
a.m. to 10:12 a.m., after the TRCH Participants had nearly finished purchasing their shares that
morning, Hennessey, Matlock, and Deel posted about TRCH on Atlas.  Despite the fact that all
of the TRCH Participants had already established large positions, the posts were designed to
falsely make it appear that Matlock and Deel were acting on Hennessey’s recommendation:
 Hennessey :  im Long TRCH for merger
 Matlock:  merger?
 Hennessey:  $TRCH merger should be done soon enough @Trade ALERT
yes
they had to do an offering
now that the offering is done full steam ahead for merger
 Deel:  added TRCH
 Hennessey:  merger will be done any day now
 Matlock:  added

50. At 10:11 a.m., Hennessey also posted about TRCH on Twitter, falsely describing
it as a “swing” position and promoting the purported upcoming merger with Meta.
51. Over approximately the next seven minutes Knight sold most of his position
(6,056 of 8,562 shares) for $2.12 per share, and Deel sold his entire position for $2.13 per share.

16
 
By 10:22 a.m., Sabo had sold his entire position for an average price of $2.19 per share.
6
  By
10:25 a.m., Matlock had sold approximately half of his position for $2.20 per share.
52. On February 11, 2021, between 9:40 and 9:41 a.m., Sabo purchased 95,000
TRCH shares for an average price of $2.41 per share.  He then posted on Atlas that he intended
to hold those shares based at least in part on Hennessey’s “due diligence” on the company:
“Long TRCH here. @Hugh Henne no way i forgot about all that damn DD[.]  How is this red on
the day lol[.]”  A few minutes later, at 9:44 a.m., he posted additional positive remarks about
TRCH:   “R/G [red to green] move will be 2.60 break on TRCH. Dont forget this was over 3
briefly yesterday.”
53. Two minutes later, he began liquidating his entire 95,000 share position in TRCH,
selling all of his shares in a two-minute span for an average price of $2.60 per share.
54. In total, the TRCH Participants’ profits on TRCH from February 10 through
February 23, 2021 were $288,603 for Hennessey; $336,138 for Matlock; $148,131 for Deel;
$109,804 for Rybarczyk; $29,831 for Sabo; and $2,757 for Knight.
D. Infiniti Pharmaceuticals, Inc.
55. On or about February 11, 2021, Sabo, Matlock, Constantin, Hennessey, and Deel
identified Infiniti Pharmaceuticals, Inc.  (NASDAQ:  INFI) as a Selected Stock.  On February
11, 2021, between 9:47 and 9:50 a.m., they purchased INFI shares in the following amounts:
Matlock (212,902), Constantin (100,000), Sabo (40,000), Hennessey (20,000), and Deel (15,529,
net).  The price of the shares ranged from $4.48 to $4.97 per share.
56. Beginning around 9:50 a.m., they began posting alerts about INFI on Atlas and
                                                            
6
 Sabo continued to buy and sell TRCH shares throughout the day as other Scheme Participants
tweeted about the stock.

17
 
Twitter:
 9:50 a.m. (Matlock on Atlas):  I halted INFI
 9:51 a.m. (Deel on Atlas):  Damn INFI insta halt baby
 9:53 a.m. (Matlock on Twitter):  $INFI halted up.  I added some right before
the halt and looking to add more
 9:54 a.m. (Sabo on Atlas):  how the hell did INFI gap up to 9 in PM

57. Following these posts, at 9:55 a.m., Deel sold 15,529 INFI shares at $5.27 per
share and Matlock sold 30,000 shares at $5.22 per share.
58. At 9:56 a.m., Deel posted about INFI on Atlas, writing:  “INFI watch for vwap
adds if you missed first.”  Matlock also posted on Atlas at 9:56 a.m. “INFI open” as he sold
another 69,657 INFI shares at $5.24 per share.
59. At 9:57 a.m., Matlock posted on Atlas “INFI soooo much volume” and posted on
Twitter “$INFI 5.50 should get the next leg.”  These posts coincided with sales, at 9:57 a.m., of
68,015 INFI shares by Matlock at $5.45 per share and 50,000 INFI shares by Constantin at $5.43
per share.
60. Then, at 9:59 a.m., Matlock posted on Atlas “halt code is currently 5.85 on INFI,”
and Sabo posted on Atlas “caught some INFI on the pullback. Bought enough shares that I can
ignore and let it do its thing. Giving myself some leg room on the SL [stop loss].”
61. Between 9:59 a.m. and 10:05 a.m., Sabo sold 20,000 INFI shares for $5.51 per
share; Matlock sold 45,230 INFI shares for an average price of $5.43 per share; Hennessey sold
20,000 INFI shares for $5.44 per share; and Constantin sold 50,000 INFI shares for $5.40 per
shares.
62. Sabo, Matlock, and Deel continued to post about INFI and buy and sell INFI
shares on February 11, 2021, and Sabo and the aforementioned Scheme Defendants reaped illicit
profits in the following amounts from this manipulation:  Matlock - $121,177; Constantin -

18
 
$58,907; Sabo - $36,559; Deel - $18,668; and Hennessey - $11,478.
FIRST CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES
(Violations of Section 17(a) of the Securities Act)

63. Paragraphs 1 through 62 above are re-alleged and incorporated by reference as if
fully set forth herein.
64. By reason of the conduct described above, defendant Sabo, in connection with the
offer or sale of securities, by the use of the means or instrumentalities of interstate commerce or
of the mails, directly or indirectly, acting intentionally, knowingly, recklessly or negligently (i)
employed devices, schemes, or artifices to defraud; (ii) obtained money or property by means of
untrue statements of material facts or omissions to state material facts necessary in order to make
the statements made, in light of the circumstances under which they were made, not misleading;
and (iii) engaged in transactions, practices, or courses of business which operated or would
operate as a fraud or deceit upon any persons, including purchasers or sellers of the securities.
65. As a result, defendant Sabo violated Securities Act Sections 17(a)(1), (2), and (3)
[15 U.S.C. §77q(a)(1), (2), and (3)] and will continue to violate those sections unless enjoined.
SECOND CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)

66. Paragraphs 1 through 62 above are re-alleged and incorporated by reference as if
fully set forth herein.
67. By reason of the conduct described above, defendant Sabo, directly or indirectly,
in connection with the purchase or sale of securities, by the use of the means or instrumentalities
of interstate commerce or of the mails, or of any facility of any national securities exchange,
intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; (ii)

19
 
made untrue statements of material facts or omitted to state material facts necessary in order to
make the statements made, in the light of the circumstances under which they were made, not
misleading, and (iii) engaged in acts, practices, or courses of business which operated or would
operate as a fraud or deceit upon any persons, including purchasers or sellers of the securities.
68. As a result, defendant Sabo violated Exchange Act Section 10(b) [15 U.S.C.
§78j(b)] and Rules 10b-5(a), (b), and (c) [17 C.F.R. §240.10b-5(a), (b), and (c)] thereunder.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
A. Permanently restrain the Defendant, his officers, agents, servants, employees and
attorneys, and those persons in active concert or participation with him who receive actual notice
of the injunction by personal service or otherwise, from violating Section 17(a) of the Securities
Act [15 U.S.C. § 77q], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5
thereunder [17 C.F.R. 240.10b-5];
B. Order the Defendant to disgorge, with prejudgment interest, all ill-gotten gains
obtained by reason of the unlawful conduct alleged in this Complaint;
C. Order the Defendant to pay civil monetary penalties pursuant to Section 20(d) of
the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C.
§ 78u(d)(3)];
D. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
E. Grant such other and further relief as this Court may deem just and proper.

20
 
JURY DEMAND
The Commission demands a jury in this matter for all claims so triable.

DATED this 25th day of May, 2023.

                                                                        Respectfully            submitted,
/s/ David J. D’Addio
David J. D’Addio
Amy Harman Burkart
Andrew Palid
Attorneys for the Plaintiff
SECURITIES AND EXCHANGE COMMISSION
Boston Regional Office
33 Arch Street, 24
th
 Floor
Boston, MA 02110
617-573-4526 (David D’Addio)

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF TEXAS 

 

 
SECURITIES AND EXCHANGE COMMISSION, 
 
    Plaintiff, 
 v. 
 
 
FRANCIS SABO, a/k/a “RICKY BOBBY,” 
 
    Defendant. 
 

 
 

Civil Action No. 22-CV-____ (___) 
 
JURY TRIAL DEMANDED 

 
 

 
COMPLAINT 

 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the 

following against the defendant: 

SUMMARY  

1. Francis Sabo promoted himself as a trustworthy stock-picking guru.  In reality, he 

was a seasoned stock manipulator.  Working with several other individuals involved in an 

expansive stock-manipulation scheme, he identified stocks ripe for manipulation, acquired 

substantial positions in these securities, and then recommended these stocks as good investments 

to followers in an online stock-trading forum he moderated with other participants in the scheme.  

He encouraged members of the stock-trading forum to purchase the selected stocks, often 

claiming that he too had bought or intended to buy these stocks for himself and that he intended 

to hold them.  Instead, he sold his shares into the demand generated by his own deceptive 

promotions and the deceptive promotions of other participants in the scheme.1      

                                                            
1  The Commission previously charged eight other participants in the scheme:  Edward 
Constantin, Perry Matlock, Thomas Cooperman, Gary Deel, Mitchell Hennessey, Stefan Hrvatin, 
Daniel Knight, and John Rybarczyk.  All but Knight were charged with violations of Section 
17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-

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2. From at least January 2020 through December 2022 (the “Relevant Period”), Sabo 

generated more than one million dollars in illicit proceeds from his participation in this stock-

manipulation scheme. 

VIOLATIONS 

3. As a result of the conduct alleged herein, defendant Sabo violated, and unless 

restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 

(“Securities Act”) [15 U.S.C. §77q(a)], Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. §78j(b)], and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5(a), (b) 

& (c)].      

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

4. The Commission seeks a permanent injunction against the Defendant, enjoining 

him from engaging in transactions, acts, practices, and courses of business of the type alleged in 

this Complaint; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this 

Complaint, together with prejudgment interest; civil penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. §77t(d)] and/or Section 21(d)(3) of the Exchange Act [15 U.S.C. 

§78u(d)(3)]; and such other relief as the Court may deem appropriate.   

JURISDICTION AND VENUE 

5. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. §77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 

U.S.C. §§78u(d), 78u(e), and 78aa]. 

6. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 

                                                            

5 thereunder.  Knight was charged with aiding and abetting the other defendants’ violations.  See 
S.E.C. v. Constantin et al., No. 22-cv-4306 (S.D. Tex. 2022).   

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§77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa].  Certain of the acts, practices, 

transactions and courses of business alleged in this Complaint occurred within the Southern 

District of Texas, and were effected, directly or indirectly, by making use of means or 

instrumentalities of transportation or communication in interstate commerce, or the mails.  In 

furtherance of the fraud scheme, Sabo communicated with other scheme participants who resided 

in the Southern District of Texas.    

DEFENDANT 

7. Francis Sabo, a/k/a “Ricky Bobby,” 38, is a resident of Troy, Michigan.  Sabo   

was a member of Atlas Trading, a stock-trading forum on the social media platform Discord, 

which offers users the ability to communicate via voice calls, video calls, and text messaging, 

among other things. 

RELATED INDIVIDUALS 

8. Edward Constantin, a/k/a “MrZackMorris,” a/k/a “Edward Constantinescu,” 38, is 

a resident of Houston, Texas.  His Twitter account, @MrZackMorris, had more than 551,000 

followers as of December 2022.  Constantin was a co-founder of Atlas Trading. 

9. Perry Matlock, a/k/a “PJ Matlock,” age 39, is a resident of The Woodlands, 

Texas.  His Twitter account, @PJ_Matlock, had more than 340,000 followers as of December 

2022.  Matlock referred to himself as the “CEO” and co-founder of Atlas Trading.  

10. Thomas Cooperman, a/k/a “Tommy Coops,” 35, is a resident of Beverly Hills, 

California.  His Twitter account, @ohheytommy, had more than 129,000 followers as of 

December 2022.  During the relevant period, Cooperman was a member of the electronic music 

group Breathe Carolina and, with Gary Deel, ran a YouTube channel called the “Goblin Gang,” 

described as “[t]wo multi-millionaire day traders filming their lives for the internet to see.”  

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11. Gary Deel, a/k/a “Mystic Mac,” 28, is a resident of Beverly Hills, California.  His 

Twitter account, @notoriousalerts, had approximately 144,000 followers as of December 2022.  

With Cooperman, Deel ran the Goblin Gang YouTube channel during the Relevant Period.   

12. Mitchell Hennessey, a/k/a “Hugh Henne,” 24, is a resident of West New York, 

New Jersey.  Along with Daniel Knight, Hennessey hosted the “Pennies:  Going in Raw” podcast 

during the Relevant Period, which promoted Atlas Trading.  His Twitter account, 

@Hugh_Henne, had more than 237,000 followers as of December 2022. 

13. Stefan Hrvatin, a/k/a “LadeBackk,” 36, is a resident of Miami, Florida.  His 

Twitter account, @LadeBackk, had more than 150,000 followers as of December 2022. 

14. Daniel Knight, a/k/a “Deity of Dips,” 28, is a resident of Houston, Texas.  With 

Hennessey, Knight was a co-host of the “Pennies:  Going in Raw” podcast during the Relevant 

Period.  His Twitter account, @DipDeity, had more than 171,000 followers as of December 

2022. 

15. John Rybarczyk, a/k/a “Ultra Calls,” a/k/a “The Stock Sniper,” 32, is a resident of 

Spring, Texas.  His Twitter account, @Ultra_Calls, had more than 267,000 followers as of 

December 2022.  Rybarczyk was the founder of Sapphire Trading, another stock trading forum 

on Discord. 

16. Defendant Sabo, along with Constantin, Matlock, Cooperman, Deel, Hennessey, 

Hrvatin, and Rybarczyk, are sometimes collectively referred to herein as the “Scheme 

Participants.”  Knight aided and abetted the Scheme Participants. 

FACTS 
 

I. SUMMARY OF SCHEME 

17. Sabo and others engaged in a long-running fraudulent scheme sometimes referred 

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to as “scalping,” in which they recommended the purchase of a particular stock without 

disclosing their intent to sell that stock.  They generally executed their scheme in three phases.  

First, Sabo and/or one of the other Scheme Participants identified a security to manipulate (the 

“Selected Stock”) and purchased shares of that particular security.  By sharing the name of the 

Selected Stock among some or all Scheme Participants, Sabo and his co-schemers provided each 

other with the opportunity to purchase shares at lower prices prior to the manipulation.  Next, 

Sabo and others promoted the stock to their followers.  Sabo primarily promoted the Selected 

Stocks in an online stock trading forum of which he was a moderator.  Other participants 

promoted the Selected Stocks on that forum, on podcasts, and/or other social media platforms 

such as Twitter in order to generate demand and inflate the share prices of the Selected Stock.  

Sabo and other Scheme Participants typically announced price targets, teased upcoming news 

about the company, and/or stated their intention to buy shares or hold their current positions for 

longer periods.  Often these announcements took the form of stock “alerts.”  Some Scheme 

Participants also posted materially false information about the stocks in podcasts and social 

media.  Finally, after promoting the stock to their followers in these ways, the Scheme 

Participants, including Sabo, sold their shares into the demand generated by their 

recommendations.  When the scheme succeeded, Scheme Participants, including Sabo, were able 

to sell their shares at higher prices and make profits.  In order to cover up their scheme and 

continue perpetrating it, Sabo and the Scheme Participants at various points deleted old tweets 

and chats, and lied to their followers about the reasons why particular stock picks were followed 

by declines in the prices of those stocks, obscuring their own roles in causing losses among their 

followers and other retail investors.    

18. Like other Scheme Participants, Sabo did not disclose that he was either planning 

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to sell, or was actively selling, a Selected Stock while recommending that his followers buy it.  

Nor did Sabo disclose that he was coordinating with other members of the scheme to manipulate 

the price and volume of trading in the stocks they were promoting.    

19. Scheme Participants’ specific roles in the fraudulent scheme varied depending on 

the timeframe and the specific security at issue.  Typically, only a subset of Scheme Participants 

helped manipulate the price of a particular stock.  Those individuals would agree on a Selected 

Stock in which they would each establish a position (i.e., “load” or “load up” on the stock).  

After loading up on the Selected Stock, most, if not all, of the Scheme Participants who had 

established positions in that stock would recommend it to their followers.  The Scheme 

Participants often referred to “swinging” or taking a “swing” position in the stock, by which they 

conveyed to their followers that they intended to hold onto the stock for at least a day, and likely 

longer.  The Scheme Participants involved in the deceptive promotion of a particular stock often 

informed other Scheme Participants of their plans.  As a result, those not directly promoting the 

stock could—and often did—take advantage of the advance knowledge by purchasing the 

Selected Stock, in advance of the promotion, and selling the Selected Stock at inflated prices that 

resulted from the promotion.  During the Relevant Period, all of the Scheme Participants, aided 

and abetted by Knight, engaged in this conduct, including scalping and other deceptive conduct, 

and all of the Scheme Participants profited from the knowledge that others were doing so.   

20. Sabo deceptively promoted stocks primarily through an online stock trading 

forum, “Atlas Trading,” which was hosted on the social media platform Discord.  Other Scheme 

Participants deceptively promoted stocked through both Atlas Trading and Twitter, among other 

platforms.   

21. Atlas Trading.   In 2018, Scheme Participants Matlock and Constantin founded 

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Atlas Trading (“Atlas”)—a free online forum that cultivated a following of novice stock traders 

by purporting to provide educational content about trading and securities markets.  Atlas 

described itself as “a team of consistent profitable traders who are willing to educate beginning 

traders with free resources of education, free trading alerts and ideas.”  Atlas was hosted on 

Discord, a social media platform that offers users the ability to communicate via voice, video, 

and text messaging, among other things.  Matlock and Constantin were among a small group of 

individuals who controlled the portion of the forum in which various Scheme Participants, 

including Sabo, recommended specific stocks (the “SMALL CAPS trading floor”).  Sub-forums 

such as the SMALL CAPS trading floor are referred to as “channels” on Discord.  Although 

anyone could view the content on the SMALL CAPS trading floor channel, only certain 

individuals, including Sabo, were granted permission to post content there.  As Matlock 

explained, “the … [SMALL CAPS] trading floor is locked . . . to most.  We kind of reserve this 

channel for people who know more about stocks and have better information that we’ve, you 

know, deemed worthy, I guess you could say, and they’ll discuss tickers in here . . . during 

market hours, it’s more about calls and what’s going on with the market.”  At various times from 

2018 to the present, Matlock and Constantin, along with Sabo, Rybarczyk, Deel, Hennessey, 

Cooperman, and Knight, were allowed to post stock recommendations on the Atlas SMALL 

CAPS trading floor.   By early 2021, Atlas had more than 150,000 members.     

22. Twitter.  Each of the Scheme Participants amassed substantial numbers of 

followers on Twitter, where most of them regularly posted about stocks they were manipulating.  

The term “FinTwit” refers to the community of Twitter users that regularly tweet about finance 

and the stock market.  The Scheme Participants considered themselves influential within the 

FinTwit community.  As Hennessey remarked in a private Discord chat, “20 of us run fintwit an 

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[sic] we have more money then [sic] some countries.”   Scheme Participants included disclaimers 

on their Twitter accounts that they were not providing stock recommendations or financial 

advice.  But they intended for their followers to act on their promotional tweets, and understood 

that their followers would do so.   

23. As described above, Sabo and other Scheme Participants repeatedly sold shares in 

direct contradiction to their public statements to followers on social media that they were 

continuing to buy, and/or holding their positions, in anticipation of higher share prices.  This 

practice is called “dumping,” and despite repeatedly dumping their stock as they recommended it 

to their followers, the Scheme Participants reassured their followers and the general public that 

they did not engage in such behavior.   

24. These false and misleading statements furthered the stock manipulation scheme 

by building trust among their followers, so that the Scheme Participants could continue to 

deceptively promote stocks, and continue to profit by selling their shares into the demand that 

their promotion generated, all without disclosing either their plans to sell, or their actual sales.  

25. Sabo understood that he was participating in an unlawful market-manipulation 

scheme, and that he and other Scheme Participants were profiting from misleading their 

followers and other members of Atlas Trading.  Sabo and other Scheme Participants discussed 

the scheme in private messages.  For example, on July 8, 2020, Sabo sent a private Discord 

message to Matlock:   

hey the patterns is becoming to obvious with Atlas..  quickly 
gonna become exposed like the stocktwits pump bros . . . Hugh 
[Hennessey]/Mystic [Deel] post an idea ... .2 mins later the 

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other one joins!  Incbob posts a swing idea . . . 2 mins later PJ 
[Matlock] joins!  we cant do it on 95% of the plays2 

Here, Sabo recognized that pump-and-dumps conducted by the Scheme Participants were 

becoming frequent and obvious, putting the scheme itself—which relied on the trust of Scheme 

Participants’ followers—at risk.    

26. Sabo returned to this theme in chats with Matlock in May 2021, having 

participated in the manipulation of numerous stocks in the interim.  Sabo sent Matlock a private 

Discord chat stating:  “we’re gtting a reputation and its becoming super obvious.  to the point 

that i dont blame people shorting us. . .  its the main reason i started posting more, to drowned 

out there obvious pump and dump plays.”  A few days later, Sabo told Matlock in a private 

Discord chat that Atlas “went from the teaching/room that has a pulse on the entire market to 

just out right pumping.”   

27. As noted, the Scheme Participants regularly trumpeted their trading successes to 

their followers.  They held themselves out as stock-picking experts worthy of the substantial 

followings they had amassed.  But they also from time to time claimed they lost money on 

particular stock “plays.”  Many of these claims of losses were false and designed to conceal the 

fact that the Scheme Participants had profited by dumping their shares into the demand their 

deceptive promotions had generated.     

28. Sabo and other Scheme Participants took further steps to hide their scheme from 

their followers as well as from regulators and law enforcement.  Among other things, Sabo and 

other Scheme Participants deleted private chats and social media posts they thought might 

                                                            
2 Tweets and Atlas posts are generally italicized but otherwise unchanged, with 
spelling/grammatical errors preserved.  Throughout the Complaint, expletives in the original text 
have been redacted in part with asterisks.   

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implicate them in violations of the securities laws.   

29. For example, on January 14, 2020, Sabo asked Matlock in a private Discord chat:  

“btw how did u delete our chat history?  i want to do that lo.”   Matlock replied:  “Oh I have a 

script for it I’ll send it to you . . . So there isn’t a bot that can delete chats and delete messages. 

But I wrote something that you can inject into discord and it just wipes sh*t lol.” 

30. Similarly, on December 11, 2020, Sabo told Matlock:  “hey i went through all my 

old tweets and deleted anything with the word advice, just to be safe . . .”   Sabo included a link 

to a query of Matlock’s tweets for the term “advice.”   Matlock thanked Sabo and confirmed he 

had deleted such tweets as well. 

II. Examples of Manipulation  

A. Regulus Therapeutics, Inc.  

31. On June 12, 2020, Scheme Participants informed each other that they intended to 

promote Regulus Therapeutics (NASDAQ:  RGLS) that day.  Beginning at 8:38 a.m., Matlock 

and Sabo exchanged a series of private messages:   

 Matlock:  Hugh [Mitchell Hennessey] posting RGLS at 10am don’t tell 
anyone though just so you know 

 Sabo:  that f*cker  

 Sabo:   I sold my .86 entry3  

 Sabo: lol 

 Sabo:  thanks tho 

 Sabo:  ill take some again 
 

32. Knowing that Hennessey planned to recommend RGLS to his followers at 10:00 

a.m., Sabo soon began buying RGLS shares.  Between 9:25 and 10:02 a.m., Sabo bought 45,403 

                                                            
3 The day before (June 11, 2020), Sabo had purchased 64,805 RGLS shares for prices ranging 
from $.83 to $.86 per share.  He sold the entire position the same day, June 11, 2020, at prices 
ranging from $.86 to $.89 per share.   

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RGLS shares at prices between $.86 and $.92 per share.  Several of the other Scheme 

Participants had also established positions in RGLS before Hennessey’s posts.  Specifically, 

Hennessey held 150,043 RGLS shares; Constantin held 147,657 RGLS shares; Rybarczyk held 

102,412 RGLS shares; Matlock held 28,000 RGLS shares; Gary Deel held 3,900 RGLS shares; 

and Knight held 3,395 RGLS shares. 

33. At 10:02 a.m., Hennessey sent a series of tweets recommending RGLS to his 

followers.  The tweets included the following:    

$RGLS  

Catalyst:  “The Company expects to complete this study in mid-2020 with topline 
results available”.   
 
They have a shareholder meeting june 17th I EXPECT data right after.   

[Image from RGLS press release on clinical trial] 

I expect this RIGHT after JUNE 17th shareholder meeting   

So data should be here within the week  @buysellshort  find: RGLS is an 
infectious disease phase… covid”   
 

34. One minute later, at 10:03 a.m., Sabo sold 10,400 RGLS shares at $.92 per share; 

Deel sold 3,900 RGLS shares at $.92 per share; and Knight sold 200 RGLS shares at $.93 per 

share. 

35. While Sabo, Deel, and Knight were selling, Hennessy continued tweeting at 10:03 

a.m.:  

$RGLS chart  
 
speaks for itself  
 
Beautiful weekly, starting to curl. Any good news sends  
 
$RGLS  
 
Catalyst… after June 17th Shareholder meeting   

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Expected to be good (if good merger deal will likely close)  
Chart (breaks out over 1)  
Covid angle PR 
Undervalued.. no more to say  
 
PT: over $1 today 1.45 – 1.75 then if data is good easily $2 
 

36. Also at 10:03 a.m., Rybarczyk tweeted:  $RGLS LONG!!!  

37. A minute later, Sabo sold another 10,000 RGLS shares for $.96 per share; 

Matlock sold 10,500 RGLS shares for $.96 per share; and Knight sold 200 RGLS shares for $.97 

per share.  At 10:05 a.m., Sabo sold another 25,003 RGLS shares, and Matlock and Rybarczyk 

sold another 1,000 and 22,412 RGLS shares, respectively, all for $.94 per share.  Shortly after 

sending a flurry to tweets recommending RGLS to his followers, Hennessey sold all 150,043 of 

his shares for $.90 to $.97 per share.     

B. Camber Energy, Inc.  

38.  Camber Energy, Inc. trades on the New York Stock Exchange under the ticker 

“CEI.”  Several Scheme Participants manipulated the price of stock of CEI at various times 

during the Relevant Period.  For example, Deel, Matlock, and Cooperman established positions 

in CEI stock and sold into their deceptive promotion in early August 2021; Sabo, Constantin, and 

Hrvatin established positions in the stock and sold into their deceptive promotion in September 

and October 2021.   

September 1 - October 5, 2021:  Sabo, Constantin, and Hrvatin  

39. On September 1, 2021, between 1:42 and 1:47 p.m., Constantin bought 2,000,000 

shares of CEI at prices between $.49 and $.51.  Constantin then began posting price targets and 

memes about CEI in an effort to boost the stock’s price and trading volume.  During the same 

period, Hrvatin purchased CEI shares, posted price targets, and then sold his entire position on 

multiple occasions.  What follows are examples of Sabo’s, Constantin’s and Hrvatin’s purchases, 

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posts, and sales. 

40. On September 1, 2021, at 1:58 p.m., Constantin tweeted:  “$CEI average .51  

swinging with @LadeBackk [Hrvatin] for $2+. Don’t give us crap if it hits $1 and you don’t 

sell. Your body, your choice. I like this stock.”  The next morning, at 9:30 a.m., Hrvatin bought 

100,000 CEI shares for $.69 per share, while announcing a $1 price target for CEI on Twitter:  

“$CEI let the $1 run begin.”  Two minutes after that tweet, Hrvatin dumped all of his shares for 

$.72 per share.    

41. On September 3, 2021, Constantin tweeted:  “My homie @LadeBackk [Hrvatin] 

holding with me. $3-5.”  On September 13, 2021, Constantin tweeted a price target of $3 to $5 

for CEI and encouraged his followers to hold onto the stock: “$CEI $3-5+.  Too many of you act 

like little bitches when there’s dips. It’s all part of the game.” 

42. On September 15, 2021, Hrvatin bought 100,000 CEI shares at $1.65 per share.  

At 3:31 p.m., two minutes after he bought the shares, he tweeted:  “$CEI I’m holding overnight. 

A huge day is coming. I can feel it.”  Within minutes, Constantin responded to Hrvatin’s tweet:   

“I ain’t selling under 3 beleed that.”  Meanwhile, Hrvatin—despite telling his followers he was 

“holding overnight” because a “huge day is coming”—had already begun to dump all 100,000 of 

his shares for $1.66 per share between 3:34 and 3:36 p.m. 

43. On September 17, 2021, between 11:50 and 11:51 a.m., Sabo purchased 75,000 

CEI shares for $1.75 per share.   

44. Sabo then immediately posted on Atlas Trading:  “CEI going for nhod [new high 

of the day].”   

45. The next minute, Sabo began dumping his CEI shares, selling 50,000 shares for 

$1.76 per share and 25,000 CEI shares for $1.75 per share.  By 11:53 a.m., he had liquidated all 

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of his CEI shares.   

C. Torchlight Energy Resources  

46.  On or about February 9, 2021, Hennessey identified Torchlight Energy 

Resources (NASDAQ: TRCH) as a Selected Stock.4  On the morning of February 10, 2021, 

between 7:00 a.m. and 10:10 a.m., Hennessey, Sabo, Matlock, Deel, and Knight (“the TRCH 

Participants”) purchased TRCH shares in the following amounts:  Hennessey (196,019), Matlock 

(383,421), Deel (210,000, net), Rybarczyk (198,907), Sabo (50,000), Knight (8,562, net).  The 

price of the shares ranged from $1.68 to $1.95 per share. 

47. After purchasing the vast majority of their shares, the TRCH Participants engaged 

in a campaign to raise the price of the stock, falsely claiming that they were holding their shares, 

while selling them to realize profits.  Knight aided and abetted the scheme, by, among other 

things, providing them with a platform, the “Pennies: Going in Raw” podcast, to promote 

specific stocks and recommend specific stock purchases to listeners.5   

48. In the course of the scheme, various participants often highlighted an anticipated 

event that would purportedly raise the stock price (a “catalyst”) and encouraged buying and 

holding the stock until the event, falsely claiming that they too were holding the stock waiting 

for the catalyst.  In the case of TRCH, the catalyst was a purported upcoming merger with 

another company, Metamaterial Inc.  Hennessey claimed that he had discovered that this merger 

                                                            
4 The company became Meta Materials Inc. (Ticker: MMAT) following a merger.   

5 Sabo knew that this podcast and its hosts were recommending stocks and providing financial 
advice to listeners.  For example, in a private Discord chat with Matlock from January 2021, 
Sabo stated “the whole PGIR [“Pennies:  Going in Raw”] thing is great, i love the guys, but we 
might need to start to distance ourselves a little from them unless they cool it down.  Hugh 
[Hennessey] is technically giving financial advice, which is not legal, way too freely. Them 
going on all these shows and what not, bringing way too much heat as well. Something to be 
weary of going forward.”    

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was coming in the course of his due diligence (“dd”) research on the company.  Hennessey 

repeatedly promoted false information about Metamaterial itself (e.g., that it was worth “north of 

$4.8 billion”) and promoted the purported benefits of the merger.  Hennessey also posted about 

other purported long-term benefits to TRCH stock holders, including a “dividend” that TRCH 

shareholders would purportedly receive after the merger.  Hennessey also claimed that 

Metamaterial was potentially partnering with Tesla, and that Metamaterial had products that had 

applications for fighting COVID-19 and thus a “10 billion dollar MARKET CAP POTENTIAL.”     

49. Specifically, in the first round of manipulation, on February 10, 2021, from 10:11 

a.m. to 10:12 a.m., after the TRCH Participants had nearly finished purchasing their shares that 

morning, Hennessey, Matlock, and Deel posted about TRCH on Atlas.  Despite the fact that all 

of the TRCH Participants had already established large positions, the posts were designed to 

falsely make it appear that Matlock and Deel were acting on Hennessey’s recommendation: 

 Hennessey :  im Long TRCH for merger 

 Matlock:  merger? 

 Hennessey:  $TRCH merger should be done soon enough @Trade ALERT 
yes 
they had to do an offering 
now that the offering is done full steam ahead for merger 

 Deel:  added TRCH 

 Hennessey:  merger will be done any day now  

 Matlock:  added 
   

50. At 10:11 a.m., Hennessey also posted about TRCH on Twitter, falsely describing 

it as a “swing” position and promoting the purported upcoming merger with Meta. 

51. Over approximately the next seven minutes Knight sold most of his position 

(6,056 of 8,562 shares) for $2.12 per share, and Deel sold his entire position for $2.13 per share.  

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By 10:22 a.m., Sabo had sold his entire position for an average price of $2.19 per share.6  By 

10:25 a.m., Matlock had sold approximately half of his position for $2.20 per share.   

52. On February 11, 2021, between 9:40 and 9:41 a.m., Sabo purchased 95,000 

TRCH shares for an average price of $2.41 per share.  He then posted on Atlas that he intended 

to hold those shares based at least in part on Hennessey’s “due diligence” on the company:  

“Long TRCH here. @Hugh Henne no way i forgot about all that damn DD[.]  How is this red on 

the day lol[.]”  A few minutes later, at 9:44 a.m., he posted additional positive remarks about 

TRCH:   “R/G [red to green] move will be 2.60 break on TRCH. Dont forget this was over 3 

briefly yesterday.” 

53. Two minutes later, he began liquidating his entire 95,000 share position in TRCH, 

selling all of his shares in a two-minute span for an average price of $2.60 per share.   

54. In total, the TRCH Participants’ profits on TRCH from February 10 through 

February 23, 2021 were $288,603 for Hennessey; $336,138 for Matlock; $148,131 for Deel; 

$109,804 for Rybarczyk; $29,831 for Sabo; and $2,757 for Knight.   

D. Infiniti Pharmaceuticals, Inc.  

55. On or about February 11, 2021, Sabo, Matlock, Constantin, Hennessey, and Deel 

identified Infiniti Pharmaceuticals, Inc.  (NASDAQ:  INFI) as a Selected Stock.  On February 

11, 2021, between 9:47 and 9:50 a.m., they purchased INFI shares in the following amounts: 

Matlock (212,902), Constantin (100,000), Sabo (40,000), Hennessey (20,000), and Deel (15,529, 

net).  The price of the shares ranged from $4.48 to $4.97 per share.  

56. Beginning around 9:50 a.m., they began posting alerts about INFI on Atlas and 

                                                            
6 Sabo continued to buy and sell TRCH shares throughout the day as other Scheme Participants 
tweeted about the stock.  

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Twitter:   

 9:50 a.m. (Matlock on Atlas):  I halted INFI 

 9:51 a.m. (Deel on Atlas):  Damn INFI insta halt baby 

 9:53 a.m. (Matlock on Twitter):  $INFI halted up.  I added some right before 
the halt and looking to add more 

 9:54 a.m. (Sabo on Atlas):  how the hell did INFI gap up to 9 in PM  
 

57. Following these posts, at 9:55 a.m., Deel sold 15,529 INFI shares at $5.27 per 

share and Matlock sold 30,000 shares at $5.22 per share. 

58. At 9:56 a.m., Deel posted about INFI on Atlas, writing:  “INFI watch for vwap 

adds if you missed first.”  Matlock also posted on Atlas at 9:56 a.m. “INFI open” as he sold 

another 69,657 INFI shares at $5.24 per share. 

59. At 9:57 a.m., Matlock posted on Atlas “INFI soooo much volume” and posted on 

Twitter “$INFI 5.50 should get the next leg.”  These posts coincided with sales, at 9:57 a.m., of 

68,015 INFI shares by Matlock at $5.45 per share and 50,000 INFI shares by Constantin at $5.43 

per share. 

60. Then, at 9:59 a.m., Matlock posted on Atlas “halt code is currently 5.85 on INFI,” 

and Sabo posted on Atlas “caught some INFI on the pullback. Bought enough shares that I can 

ignore and let it do its thing. Giving myself some leg room on the SL [stop loss].” 

61. Between 9:59 a.m. and 10:05 a.m., Sabo sold 20,000 INFI shares for $5.51 per 

share; Matlock sold 45,230 INFI shares for an average price of $5.43 per share; Hennessey sold 

20,000 INFI shares for $5.44 per share; and Constantin sold 50,000 INFI shares for $5.40 per 

shares. 

62. Sabo, Matlock, and Deel continued to post about INFI and buy and sell INFI 

shares on February 11, 2021, and Sabo and the aforementioned Scheme Defendants reaped illicit 

profits in the following amounts from this manipulation:  Matlock - $121,177; Constantin - 

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$58,907; Sabo - $36,559; Deel - $18,668; and Hennessey - $11,478.  

FIRST CLAIM FOR RELIEF 
FRAUD IN THE OFFER OR SALE OF SECURITIES 

(Violations of Section 17(a) of the Securities Act) 
 

63. Paragraphs 1 through 62 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

64. By reason of the conduct described above, defendant Sabo, in connection with the 

offer or sale of securities, by the use of the means or instrumentalities of interstate commerce or 

of the mails, directly or indirectly, acting intentionally, knowingly, recklessly or negligently (i) 

employed devices, schemes, or artifices to defraud; (ii) obtained money or property by means of 

untrue statements of material facts or omissions to state material facts necessary in order to make 

the statements made, in light of the circumstances under which they were made, not misleading; 

and (iii) engaged in transactions, practices, or courses of business which operated or would 

operate as a fraud or deceit upon any persons, including purchasers or sellers of the securities.   

65. As a result, defendant Sabo violated Securities Act Sections 17(a)(1), (2), and (3) 

[15 U.S.C. §77q(a)(1), (2), and (3)] and will continue to violate those sections unless enjoined. 

SECOND CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 
 

66. Paragraphs 1 through 62 above are re-alleged and incorporated by reference as if 

fully set forth herein.  

67. By reason of the conduct described above, defendant Sabo, directly or indirectly, 

in connection with the purchase or sale of securities, by the use of the means or instrumentalities 

of interstate commerce or of the mails, or of any facility of any national securities exchange, 

intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; (ii) 

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made untrue statements of material facts or omitted to state material facts necessary in order to 

make the statements made, in the light of the circumstances under which they were made, not 

misleading, and (iii) engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon any persons, including purchasers or sellers of the securities. 

68. As a result, defendant Sabo violated Exchange Act Section 10(b) [15 U.S.C. 

§78j(b)] and Rules 10b-5(a), (b), and (c) [17 C.F.R. §240.10b-5(a), (b), and (c)] thereunder. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

A. Permanently restrain the Defendant, his officers, agents, servants, employees and 

attorneys, and those persons in active concert or participation with him who receive actual notice 

of the injunction by personal service or otherwise, from violating Section 17(a) of the Securities 

Act [15 U.S.C. § 77q], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5 

thereunder [17 C.F.R. 240.10b-5]; 

B. Order the Defendant to disgorge, with prejudgment interest, all ill-gotten gains 

obtained by reason of the unlawful conduct alleged in this Complaint; 

C. Order the Defendant to pay civil monetary penalties pursuant to Section 20(d) of 

the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. 

§ 78u(d)(3)];  

D. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and  

E. Grant such other and further relief as this Court may deem just and proper. 

 

 

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JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable. 

 

DATED this 25th day of May, 2023. 

 

      Respectfully submitted, 

/s/ David J. D’Addio 
David J. D’Addio 
Amy Harman Burkart 
Andrew Palid 
Attorneys for the Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
Boston Regional Office  
33 Arch Street, 24th Floor 
Boston, MA 02110 
617-573-4526 (David D’Addio) 

 

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