Meme-Stock Influencers Get Securities Fraud Indictment Dismissed

Federal prosecutors who indicted eight social media influencers for securities fraud and conspiracy failed to state a criminal offense, a federal judge in Houston said.

The government failed to allege that any investors suffered actual harm “because of” the influencers’ alleged deceit, or that the goal of the fraud was to harm anyone’s “traditional property interests,” the US District Court for the Southern District of Texas said.

The court’s decision rested on the US Supreme Court’s 2023 decision in Ciminelli v. United States.

Decided after the defendants were initially indicted in 2022, Ciminelli invalidated the “right-to-control” theory of fraud, ...