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(b)Cybersecurity legend John McAfee is in hot water again(/b), hit with fraud and money-laundering charges tied to a sneaky cryptocurrency price manipulation plot, according to the Justice Department.
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The feds say McAfee and a buddy were pumping up seven “initial coin offerings” (ICOs) to his Twitter fans, conveniently forgetting to mention he was getting paid to hype them.
The #SEC had already called him out for this, claiming he pocketed a cool $23 million in 2017 and 2018 by (i)offloading his altcoins while convincing others to buy in.(/i)
McAfee’s also tangled up in a separate mess with financier Barry C. Honig’s crew, who the SEC says raked in over $20 million from #pump-and-dump schemes with three small companies.
One of those was MGT Capital Investments, which saw its stock skyrocket in 2016 after announcing McAfee would become CEO and that it was snapping up two cybersecurity firms. Honig’s group, holding MGT shares, expected a massive payday from the deals, but revised terms left them high and dry.
The allegations center on McAfee’s social media antics, where he used his massive Twitter following to hype up seven “initial coin offerings” (ICOs) without disclosing he was paid to promote them. According to the Securities and Exchange Commission (SEC), which previously filed civil charges against him, McAfee raked in a staggering $23 million between 2017 and 2018. His strategy? Pump up obscure altcoins to his followers, then quietly sell his own holdings at inflated prices a classic “pump-and-dump” move that left unsuspecting investors holding the bag.
But the crypto scheme is just one piece of the puzzle. McAfee’s name also surfaced in a separate securities #fraud case involving financier Barry C. Honig and his associates. The SEC claims Honig’s group pocketed over $20 million through pump-and-dump schemes targeting three small public companies.
(b) One of those was MGT Capital(/b) Investments Inc. (OTC: MGTI), a company that became a focal point of the drama. In 2016, MGT’s stock price shot through the roof after announcing it was acquiring two cybersecurity businesses and bringing McAfee on board as chief executive. The hype was real #investors were thrilled at the prospect of McAfee, a tech legend, steering the ship.
Honig’s group, who held significant shares in MGT, stood to make millions through their financial stake in the cybersecurity firms being acquired. The plan seemed golden: leverage McAfee’s name and the cybersecurity acquisitions to boost MGT’s value, then cash out. But things didn’t go as planned.
The acquisition deals were renegotiated, and Honig’s crew missed out on the massive financial windfall they’d been banking on.
(li)The fallout left a trail of disappointed investors and a tangled web of legal troubles.(/li)
