Stock-picking robot was scam run by British youths, SEC says
Would you invest with a stock-picking robot that promises to double your money?
If so, you’d be among the 75,000 people, most of them in the U.S., who got scammed by a pair of precocious 16-year-olds who masterminded a far-fetched but elaborate penny-stock scam that netted them more than $3 million. The scheme, which is alleged to have begun in 2007 when the youths were 16, lasted for four years before the pair got nabbed by the Securities and Exchange Commission, the SEC is reporting.
The British youths, Alexander John Hunter and Thomas Edward Hunter, created dual websites, Daytradingrobot.com and Doublingstocks.com, in which they claimed that a computer programmer at an investment bank had created a robot that could identify stocks that were about to shoot up.
In reality, the youths, who are twin brothers, had created a third website, Equitypromoter.com, in which they offered to tout stocks for a fee. “One email to this list of people rockets a stock price,” the brothers promised.
Unknown to the investors on the first two sites, the robot recommended the shares of whatever companies paid for promotion.
Investors forked over $47 a year for the robot’s investment newsletter, with some paying an additional fee for the “home version” of the robotic software. Needless to say, the home version simply recommended the stocks the brothers were being paid to push.
The boys’ lawyer did not return a call seeking comment.
The targets of such SEC actions often have to pay back their ill-gotten gains, but at least the brothers will have a heck of a story about how they spent their summer vacation.
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