SEC charges Brit twins over $1.2m fake stock picking robot scam
23 April 2012 | 3156 views | 0
The US Securities and Exchange Commission has charged twin brothers from England with using a fake "stock picking robot" to defraud around 75,000 investors out of $1.2 million.
Alexander and Thomas Hunter were just 16 years old when they carried out their Internet-based pump-and-dump scheme in 2007, claims the SEC, touting their fake robot, dubbed Marl, which purportedly identified penny stocks set to double in price.
The pair sent out e-mail newsletters through a pair of Web sites they created to tout stocks selected by the 'robot' - which they described as a highly sophisticated computer trading program that was the product of extensive research and development.
Around 75,000 victims, mainly in the US, paid $47 apiece for annual newsletter subscriptions. Some investors paid an additional fee of $97 for the "home version" of the robot software.
However, claims the SEC, the Hunters were using a third site to offer their services as stock promoters - picking up another $1.87 million in fees from known or suspected stock promoters to push companies in their newsletters.
Thomas Sporkin, chief, office of market intelligence., SEC, says: "The Hunters used the anonymity of the Internet and the promise of easy riches to prey on investors. While touting their supposed breakthrough investment technology on two websites, the Hunters were racking up fees as stock promoters through a third."
According to the BBC, Newcastle Crown Court has already ordered Alexander Hunter to pay back nearly $1 million after he admitted providing unregulated financial advice. He also received a suspended 12-month prison sentence.