How Fraudulent Companies Use YouTubers to Scam Millions From Retail Investors

In recent years, a deeply troubling and exploitative trend has taken hold in financial markets. Companies, many teetering on the edge of bankruptcy, have resorted to paying YouTubers to promote their stocks, luring amateur investors into schemes that are nothing more than elaborate pump-and-dumps. This calculated exploitation misleads retail investors, leaving them with devastating losses while insiders and third-party promoters profit handsomely.

This scheme is insidious, often orchestrated through third-party marketing agencies, allowing companies to sidestep regulatory scrutiny. Many of these companies disguise themselves as new and innovative, but upon closer examination, their histories reveal a trail of failure and rebranding meant to deceive investors. Take Rua Gold Corp., for example. Formerly known as First Uranium Resources Ltd., the company has rebranded and shifted its focus from uranium to gold, hoping to erase its troubled past. Similarly, Lexton Mining Corp., once Lexton Life Sciences Corp., abandoned its ventures in life sciences to rebrand as a mining company. These industry pivots and name changes obscure decades of poor performance, creating the illusion of a fresh start for unsuspecting investors.

The mechanics of the pump-and-dump scheme are disturbingly clear. Companies compensate third-party marketing agencies with shares, often in the form of restricted stock units or stock options, instead of cash. These agencies, conveniently not classified as insiders, avoid the regulatory transparency that would otherwise reveal their manipulative trading activities. After their lock-up periods expire, these agencies collaborate with YouTubers to promote the stock, inflating its price through deceptive marketing. Amateur investors, drawn in by what they perceive as credible recommendations, rush to buy these stocks, unknowingly fueling the bubble. Once the price peaks, those behind the scheme sell their shares, leaving retail investors holding the bag when the stock inevitably crashes.

Consider Gold Standard Media, which exemplifies this shady practice. The agency received three million shares of Traction Uranium Corp. over a three-month consultation agreement. To pump the stock, they hired Morris Media LLC, paying $25,000 to create promotional content. This created a facade of organic interest, but the true goal was simple: inflate the stock price just long enough for insiders and promoters to cash out. Predictably, once the stock collapsed, retail investors were left with steep losses.

The financial fallout for retail investors is catastrophic. An estimated 80% of the companies involved in these schemes have seen their stock prices plummet, many by staggering amounts. For instance, Alaska Energy Metals Corp. paid YouTuber Paul Joseph Watson $5,000 to promote their stock, which traded at $0.40 before the video’s release on January 8, 2024. Today, the stock is down 67%, proving that the hype was a carefully constructed illusion. This wasn’t an isolated incident—Alaska Energy Metals also paid YouTuber Task & Purpose $40,000 for another promotional campaign, and the pattern repeats across multiple instances.

Another glaring example is Silver Mountain Resources Inc., which paid YouTubers The Economic Ninja and I Allegedly $20,000 each to promote their stock. The result? The stock has lost 73% of its value since the campaigns, devastating investors who trusted the influencers' endorsements. Similarly, Uranium Royalty Corp. paid Katusa Research an astonishing $1,250,000 to promote their stock. While the stock’s decline—8% since the campaign—is less dramatic, it still exposes the short-term nature of these manipulative tactics.

Even large-cap companies are not above these dubious strategies. CNX Resources, a company with a $5 billion market capitalization, has also engaged in paying YouTubers to promote its stock. The inclusion of such a significant player in these schemes demonstrates the alarming scale and reach of these manipulations. It also blurs the line between desperate small-cap companies and established firms, raising serious questions about the integrity of corporate governance across the market.

Many of the companies involved were on the brink of financial collapse before turning to these influencer-driven promotions as a last-ditch survival strategy. By using the temporary price surge to issue new shares, these companies dilute their stock even further, compounding losses for retail investors. The reliance on YouTubers and influencers, who often have little to no understanding of the broader implications, adds another layer of deception. These content creators unwittingly—or worse, knowingly—become accomplices in schemes designed to prey on the trust and naivety of their audiences.

The lack of transparency is another glaring issue. Since third-party marketing agencies are not classified as insiders, their trading activities are invisible to the public. This obscurity enables them to exploit the artificial price spikes they create without fear of detection. For example, a company like Alaska Energy Metals Corp. can pay influencers through an intermediary, such as a marketing agency, ensuring that neither the company nor the YouTubers bear the full brunt of regulatory scrutiny. The integrity of the market is compromised by this flaw, and individual investors are also totally in the dark about the real reasons for these promotions.

The result is a toxic cycle. Companies struggling to survive manufacture excitement around their stock through promotions, driving up retail interest. Once the price surges, insiders and third-party participants cash out, leaving retail investors with worthless shares. For those who fall for these schemes, the financial and emotional toll is devastating, as they see their hard-earned savings evaporate in the aftermath of a pump-and-dump.

A full spreadsheet detailing the companies and YouTubers involved in these manipulative schemes can be found here, credit to YouTuber The Plain Bagel, whose investigative work enabled the exposure of this widespread fraud. Without such meticulous documentation, it would be nearly impossible to uncover the scale of these schemes.

This kind of behavior is not only immoral, but it also threatens the fundamental principles of justice and trust in the financial system. By exploiting loopholes, manipulating influencers, and preying on amateur investors, these companies and their collaborators are profiting at the expense of those who can least afford it. The lack of accountability for third-party agencies, combined with the misuse of social media platforms, highlights an urgent need for regulatory reform. If these practices are not curtailed, the damage to retail investors and the broader market will only continue to grow.

The manipulation of retail investors through these campaigns is not just an attack on individuals—it’s an attack on the credibility of financial markets. This exploitation must end. Regulatory agencies need to close the gaps that allow these schemes to flourish and ensure that both companies and their collaborators face meaningful consequences for their actions. Until then, retail investors remain vulnerable to a system rigged against them, where trust is weaponized and profit is prioritized over ethics.

The significance of independent media in exposing unethical behavior and defending investors' interests is shown by this investigation. In order to maintain accountability and openness in the financial markets, we at InvestorTurf are committed to providing comprehensive, objective information. With your help, we can keep continuing this important job. To help us maintain the standards that investors deserve, we invite you to support InvestorTurf if you think that investigative journalism has the ability to bring about constructive change.

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