“A pretzel-shop worker committed a $1 million fraud to buy Tesla, GameStop, and Nvidia shares - and ended up making $7,000 for his broker, SEC says Theron Mohamed Tue, August 29, 2023, 10:15 PM PDT·3 min read In this article: GME NVDA AMC GameStop stocks are soaring after its CEO announced his departure. See how the company went from retail giant to gaming dinosaur. GameStop has been a key player in the video-game industry for over two decades. Its business seemed to be on the verge of collapse, until company shares skyrocketed in January and February thanks to traders on Reddit. But will these stock rallies be enough to save GameStop? Tesla CEO Elon Musk.HANNIBAL HANSCHKE /Getty Images A fast-food worker obtained $200,000 of advance credit by making bogus deposits, the SEC says. The Auntie Anne's employee piled the entire sum into Tesla, Nvidia, GameStop, AMC, and other stocks. His broker caught on and liquidated the holdings a day later, making a roughly $7,000 profit. A fast-food worker duped his online broker into giving him $200,000 of advance credit, then plowed the ill-gotten funds into stocks including Tesla, Nvidia, GameStop, and AMC Entertainment, according to the Securities and Exchange Commission. Deyonte Jahtori Anthony, 23, was a part-time employee of an Auntie Anne's in North Carolina last summer. On July 1, he applied for a self-directed brokerage account, claiming he earned between $25,000 and $50,000 a year when he was only making about $400 a month, the SEC said in a complaint filed on August 25 and viewed by Insider. Anthony linked his trading account to a bank account with only 9 cents in it, then initiated unfunded deposits totaling $1 million between July 5 and 6. The pending deposits granted him access to $200,000 in immediate credit, which he plowed into eight stocks and an exchange-traded fund on July 6, the SEC said. The pretzel-shop worker piled about $85,000 into Apple, $78,000 into GameStop, $22,000 into Nvidia, $13,000 into AMC Entertainment, and $700 into Tesla. He invested another $800 across Cano Health, Electronic Arts, Resolute Forest Products, and ETFMG Prime Cyber Security, per the SEC. GameStop and AMC are both "meme stocks" that skyrocketed in price in early 2021, as retail investors bought them en masse in a bid to punish short sellers and pocket huge gains in a matter of days. Tesla and Nvidia also have passionate fanbases who expect the pair to win big from the artificial-intelligence revolution. Intense hype has helped to nearly double and more than triple the automaker and graphics-chip company's respective stock prices this year. Nvidia. All but one of Anthony's trades were in the green when his broker cashed out, the SEC complaint shows. https://finance.yahoo.com/news/pretzel-shop-worker-committed-1-201647808.html
The article states, "Anthony linked his trading account to a bank account with only 9 cents in it, then initiated unfunded deposits totaling $1 million between July 5 and 6. The pending deposits granted him access to $200,000 in immediate credit, which he plowed into eight stocks and an exchange-traded fund on July 6, the SEC said." How does this work? I've used a number of online brokers(TD Ameritrade, IB, Tradezero, MerillEdge, WeBull, Robinhood, etc.) and never for once is this possible! You just deposit and they give you 4x intraday leverage and 2x leverage as a retail trader/investor.
4x is not an issue, it is standard for a good broker. so if this guy were to close the positions in the early afternoon during the same trading session, he could have made 7 grand? for no money down? when he is liquidated, he got no penalty because lack of internal control from the broker?
How much did this fast food worker earn? $1m? Quite a few vital pieces of information are missing. The broker liquidity the fast food worker's position a day later. Would that cause the worker to miss out on tons of potential profit? If that is the case, is the worker going to sue the broker? He obviously has great potential. Soon he will be a billionaire.
Misleading article... He invested 200k and made 7k that day before the account was shut down. That broker should be fined for their stupidity.
This pretzel worker trader is very different from the Canadian negative-crude oil trader. This Canadian negative crude oil trader - traded going-to-expire-in-a-few minutes crude oil contract - Crude oil futures prices became negative - he suffered millions of dollars in losses in just a few minutes (Because the chart didn't show the price was negative) - Interactive Brokers covered ALL the losses This pretzel worker trader has great potential. This Canadian negative crude oil trader is condemned for eternity. No experienced traders dare to touch a going-to-expire-in-a-few-days contract.
%% SOUNDS fairly reasonable\ $1,000,000 deposit, so broker gives 20% credit + co makes money also off bid\ask. SCHW gives 100%,[ real cash example ]but on real money LOL, so must not be SCHW or he gets zero for fake money. Some refinanced thier house \so got more than 4x + bank foreclosed on home, so good deal for foreclosure buyer. In that margin example [based on fake funds] sounds like his broker auto closed him out, probably @ a terrible price + kept the profit since it was thier money + credit. A broker or business owner can do a lot of different things, within certain boundaries. Cash metal$ dealer some times round$ up to nearest dollar, small sell; not on 72' tractor trailer load LOL