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I believe in giving credit where credit is due and, no matter what you come to think about the kids involved in this fraud, you have to admit that this is pretty damned crafty for a couple of 16-year olds. The SEC is going after twin brothers in the UK for scamming American investors out of $1.2 million with claims of having a "stock picking robot" that identifies stocks set to appreciate by up to 400%. The brothers, now 21, were just 16 when they came up with the scam.

They say a fool and his money are soon parted, and this certainly seems to prove that. These guys had it all figured out. Not only did they sell a bogus trading system to over 75,000 people (mostly Americans), the stocks that the system "recommended" were all companies that paid the brothers to promote their stocks. And here's the kicker: the SEC might not have a leg to stand on.

Jurisdictional concerns aside, I'm not sure these kids technically broke any securities laws. All they did was sell a newsletter for $47 a month and/or a computer program for $97 which was basically an RSS feed for the companies the brothers decided to pump at the moment. It's not like they were clearing trades or anything. If anything, this sounds more like the FTC's ballgame than the SEC's.

Maybe it's my defective personality, but I can't help but admire the simplicity of the scheme and the deftness with which it was carried out, especially in light of how young these guys are.

They had the hook: a computer algorithm named Marl, engineered by Goldman Sachs and now secretly available to you, Mr. Investor. They had the chutzpah: charging $47 for a newsletter and $97 for an RSS feed of stocks they picked out of thin air - and getting 75,000 suckers on board. And they had the brains: they realized early on that the subscription fees were chump change compared to what companies were willing to pay to have their stock pumped - and they raked in another $2 million in promotion fees.

These guys shouldn't be in court, they should be teaching a clinic. I hope their lawyer has half the brains they do and manages to get this thrown out. No matter what happens, at the very least this is hilarious. The only reason people fall for scams like this is that they're greedy, so they mostly get what they deserve.

Or am I wrong?

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Comments (9)

  • In reply to JeremyLinMVP
    Amphipathic's picture

    These guys are definitely champs in my book.

    Is that you, brady4mvp?

  • Downeasta's picture

    If I met these guys, I'd definitely shake their hands. If people are really that stupid, then they deserve to be ripped off.

  • Ovechkin08's picture

    For those of you not from the UK, Whitely Bay, the place they are from, is one of the poorest areas of the UK, up near NewCastle. Its the same place where a group of guys sold a "fake" Area 51 alien autopsy video a few decades back.

  • AtlGator's picture

    Sounds like a couple of future big swinging dicks

  • Scott Irish's picture

    I'm not saying I condone their actions, but I giggled. They're no different than these "TRAINERS HATE HIM" or "LANGUAGE PROFESSORS HATE HIM" ads I see on Yahoo.

  • Texsun's picture

    I don't believe anyone "deserves" to be ripped off but I also don't think there should be any legal action against theses guys because they had ready and willing buyers that didn't do their homework.

    I also think that someone that makes a living scamming people will eventually get what's coming to them in the form of street justice or losing the ability to do business since no one will trust them.

    Ayn Rand's philosophy of rational self interest (which I adhere too) would demonstrate multiple ways in which this ultimately will burn them not even including the legal repercussion.

  • In reply to Texsun
    UFOinsider's picture

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