Curriculum·R410 Copy Trading, Vaults, and Agentic Execution·about 32 min
The incentive structure, first
By the end of this lesson you can
- →Write down the leader's payoff function before looking at any performance figure
- →Compute what a profit share with no clawback is worth on a trade with zero expectancy
- →Show why the leader's optimal risk level is higher than yours
- →Identify the three ways a promoter can profit from your position rather than from theirs
Senior · enrolled learners
This lesson opens with The Atlas Trading charges, December 2022.
- What happened
- In December 2022 the SEC charged eight social media influencers, seven with securities fraud and an eighth, a podcast co-host, with aiding and abetting, and the Department of Justice indicted all eight in a parallel criminal case over a stock manipulation scheme run through Twitter and Discord. Two of the defendants co-founded a Discord forum called Atlas Trading, which had more than 150,000 members by early 2021 according to the SEC complaint, and the Justice Department stated the defendants collectively had over 1.5 million Twitter followers. The charging documents allege that they presented themselves as successful traders, recommended particular stocks to their followers, and sold their own shares into the demand those promotions generated without disclosing their intent to sell. The Department of Justice stated the defendants profited by at least approximately $114M between about January 2020 and April 2022, and that each faced a maximum of 25 years on the conspiracy count and on each securities fraud count. These are allegations: one defendant pleaded guilty in March 2023, and the case against the other seven, dismissed in March 2024 and reinstated by the Fifth Circuit in October 2025, was scheduled for trial in May 2027.
- The decision point
- The money was real. On the charging documents' account the promoters genuinely profited and the trades genuinely happened. What was not displayed was the source of the money, which was the buying their followers did. Before evaluating anybody's record, write down how they are paid, because if the answer includes your order flow or your capital then their track record is a description of you rather than of them.
- Recorded loss
- $114,000,000
What you will be able to answer
- →What do you write down first?
- →What is a profit share worth on a zero-expectancy trade?
- →Why is the leader's optimal risk higher than yours?
- →What are the three ways a promoter profits from you?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.justice.gov/usao-sdtx/pr/eight-men-indicted-114-million-securities-fraud-scheme-orchestrated-through-social
- https://www.sec.gov/newsroom/press-releases/2022-221
- https://www.sec.gov/files/litigation/complaints/2022/comp-pr2022-221.pdf
- https://www.justice.gov/criminal/criminal-vns/case/united-states-v-constantinescu-et-al
- https://www.ca5.uscourts.gov/opinions/pub/24/24-20143-CV0.pdf
- https://www.dynamisllp.com/knowledge/dynamis-secures-dismissal-of-indictment
- https://www.cftc.gov/PressRoom/PressReleases/8549-22
- https://www.cftc.gov/PressRoom/PressReleases/8696-23
Confidence high·Volatility low·Reviewed 2026-10-22·Owner unassigned
Contested
The Atlas Trading matter involved charges and the defendants were entitled to contest them. This lesson uses the alleged mechanism as described in the public charging documents and the stated profit figure, and takes no position on the outcome for any individual. The structural point does not depend on any conviction. The criminal case has moved since: one defendant, Daniel Knight, pleaded guilty on 27 March 2023; the Southern District of Texas dismissed the superseding indictment against the other seven in March 2024, applying Ciminelli; on 2 October 2025 the Fifth Circuit reversed and reinstated it in United States v. Constantinescu, No. 24-20143, relying on the Supreme Court's later Kousisis decision; and the Justice Department's case page (updated 19 May 2026) lists trial for the seven as scheduled for 3 May 2027. The SEC complaint puts the profits at approximately $100M from at least January 2020; the $114M from January 2020 to April 2022, the 1.5 million followers and the 25-year maximum are the Justice Department's figures in its press release. The SEC complaint dates Atlas Trading's 150,000 members to early 2021.
Profit share arrangements vary widely and some include high-water marks, clawbacks or the leader's own capital alongside followers. Per P7 those are genuine differences and part four is the test for whether they are present. The arithmetic in part two describes the common case with no clawback.
S205-04 owns tracing a leader's method at Sophomore level. R410-02 owns the record itself. This lesson owns the payoff function and nothing else. Keep the splits.