B. The Foothills Exploration, Inc. (“FTXP”) Stock Promotion Scheme
92. On December 9, 2019, Costello acquired over 7.6 million shares of FTXP. That day, the stock closed at $0.007 per share.
93. That evening, Costello messaged Ferraro about Ferraro promoting FTXP, and Costello agreed to share 30 percent of his profits with Ferraro.
94. Costello instructed Ferraro to wait until 10 a.m. the next day because he planned to purchase additional shares.
95. On the evening of December 9, Ferraro teased the following in a tweet: “I have a MASSIVE MASSIVE MASSIVE stock to announce with a PERFECT chart. Stay tuned. Announcement tomorrow morning!!!!!!”
96. At 9:23 a.m. on December 10, Ferraro asked Costello what “central theme” could be used to promote FTXP. Costello replied at 9:41 a.m., writing only: “Large reserves.”
97. In the meantime, at 9:32 a.m., Ferraro tweeted that “[t]he new stock I’m calling at 10 am has a 90% [chance] of being a 60 bagger within 30 days. That’s 6,000% gain friends!”
98. At 9:44 a.m., after confirming with Costello that he should start tweeting, Ferraro tweeted: “The huge 60 bagger call is $FTXP!!!!!!!!!!!!!!!!!!!!!!! The word on the street is they hit the motherlode!!!!!!! Huge reserve found and they got it all! And the actual public float around 2M shares!!!”
99. Ferraro would go on to post at least 90 promotional tweets about FTXP on December 10—including, for example, “$FTXP A hedge I know owns 5M of this” and “$FTXP On the verge of a MAJOR MAJOR MAJOR breakout!!!!!!!!!!”—and over 100 additional tweets over the next two weeks. FTXP’s stock price closed at $0.0273 on December 10, a 290 percent increase over the prior day’s close, and reached an intraday high of $0.0465 on December 11.
100. At no point did Costello or Ferraro disclose that Costello was selling FTXP stocks during this time period or that Ferraro would receive a share of Costello’s profits.
101. Costello, who began selling his shares of FTXP shortly after Ferraro began tweeting about FTXP, sold his entire position by December 13, 2019 for profits of approximately $113,000. Costello shared over $23,000 of those profits with Ferraro.
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