SEC Litigation Release – When Insider Trading and Fraud Cross Paths


They say everything has a price. In this case, Steven Gallagher’s integrity, morality, and, potentially, freedom cost just north of $1 million. The SEC’s complaint alleges that for years, Gallagher, a stock trader, used his Twitter handle to make thousands of tweets encouraging his numerous followers to buy stocks for which he had already amassed holdings in secret. His followers, being duped into thinking they had gained inside knowledge, would purchase the stock, resulting in it artificially gaining value. Gallagher would then sell those stocks at inflated prices while he continued to recommend others buy them while providing no disclosures and, in some cases, denying he had any previous shares in his portfolio.

With the state of today’s technology, how is it possible for actions like this to fly under the radar for literal years? The damning evidence is not hard to find. Any analysis of the inverse nature of thousands of tweets, coupled with measurable sell offs, would expose the alleged pump and dump scheme.

Apparently, if Securities Fraud alarms go off in a forest and no one is around to hear, they don’t make a sound. If the first thought as a Compliance Officer is to ban Twitter, our fear is that they’ve missed the point entirely. We all know the number of communication channels is continuously expanding. Efforts to ban one specific platform after another is frivolous and short sighted. Do not fall into an endless game of cat & mouse to support a platform – you’ll always be at least one step behind.

These types of communications are going to take place. Individuals like Steven Gallagher are willing to risk it all for just $1 million. It’s time for real action. Technology allows us to couple trade surveillance, E-comm surveillance, social activity, media, text messaging, and others into a unified Holistic Surveillance model. Analysis can be made from more relevant and complete data, as opposed to only seeing half the picture. The data is there, available, and able to be utilized; the magic is when you tie them together to find the real story.

Let Technically Creative come in and build out a holistic supervision package. It’s time we end the game of cat & mouse and leave the childhood games to Squid Game. 

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