Twitter fraudster Alex DeLarge charged in penny stock scheme
Steven Gallagher, known online as “Alex DeLarge,” pleaded guilty last month to securities fraud tied to a penny-stock scheme he ran on Twitter. The 51-year-old Ohio resident admitted to misleading investors about his stake in SpectraScience, a shell company with no assets, while selling shares he had hyped to his 70,000 followers.
Members of the online trading community have expressed frustration over the lack of action against larger players in the penny-stock world. One trader wrote, “These no-name people keep getting charged but the BIG Fish keep pumping?!”
From fictional psychopath to real-life fraud
Gallagher used the name of the violent protagonist from A Clockwork Orange as his Twitter handle, @AlexDelarge6553. Before his account was restricted, he gained a following by aggressively promoting low-priced stocks, often making exaggerated claims about their potential.
Penny stocks—shares of small companies trading for less than $5—are highly volatile. Many, like SpectraScience, are shell companies with no real operations. SpectraScience, which once developed medical devices, has no headquarters, website, or active business, according to court documents.
Prosecutors stated Gallagher purchased millions of SpectraScience shares in late 2020, then spent weeks tweeting bullish messages to inflate demand. On January 28, 2021, after selling much of his holdings, he posted a screenshot of a buy order for one million shares with the caption, “Ok one more mill averaging up! Haven’t sold a share. $scie #buyscie buy the ask sell the ask. Most are! Some arnt!!”
The Securities and Exchange Commission suspended trading in SpectraScience on February 11, 2021, citing concerns about manipulation. At least two investors lost thousands after buying shares based on his misleading posts.
A $22,000 scheme
The guilty plea covers only SpectraScience, where Gallagher earned about $22,000. His lawyer, Eric Rosen, said Gallagher “accepted complete responsibility” for the SpectraScience tweets and “apologizes to those Twitter followers who purchased shares based on those posts.”
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Sentencing is scheduled for June 27. Though the charge carries a maximum 20-year prison term, federal guidelines usually result in shorter sentences for first-time offenders.
The case has been compared to the 2021 GameStop surge, when retail traders on Reddit drove a massive stock rally. Unlike that movement, which was seen as a pushback against hedge funds, Gallagher’s actions relied on deception. He coordinated with associates over Twitter direct messages to promote stocks he privately described as “just a shell with no guts.”
Uncertainty lingers for other Twitter traders
His arrest last October led to speculation that more charges would follow. So far, none have materialized. Some users openly question whether regulators target smaller promoters while larger ones operate freely.
One trader asked in February, “So these people don’t think they are gonna get caught?”
The SEC has prioritized social media-driven stock manipulation in recent years, but enforcement remains challenging due to the volume of activity on platforms like Twitter and Reddit. For now, the case serves as a rare example of accountability for online pump-and-dump schemes, though the full extent of his activities remains unresolved.
Reporters noted similarities between Gallagher’s tactics and those used in high-profile stock promotions, where public figures drove interest in speculative assets.
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