FBI hunts fraud on Facebook, Twitter

(November 26) The FBI has turned to social media, mainly Facebook and Twitter, to trace and investigate a wide array of securities fraud.

The agency’s “Operation Perfect Hedge” has led to the conviction of more than 60 hedge fund fraudsters. Online communications were evidence for the indictment of Matthew Martona in November, whose $276M insider-trading scheme is the largest on record. Twitter activity is shown to be a statistically robust predictor of market indices. And the emerging Zeek Rewards case, the North Carolina Ponzi scheme involving over a million former affiliates, was conducted online, and promoted on social networks and YouTube.

(Reuters at www.reuters.com)