An old article from the always exciting Michael Lewis about a 15 year old kid who was fighting the SEC: http://www.nytimes.com/2001/02/25/magazine/25STOCK-TRADER.html?pagewanted=all&pagewanted=print "On Sept. 20, 2000, the Securities and Exchange Commission settled its case against a 15-year-old high-school student named Jonathan Lebed. The S.E.C.'s news release explained that Jonathan -- the first minor ever to face proceedings for stock-market fraud -- had used the Internet to promote stocks from his bedroom in the northern New Jersey suburb of Cedar Grove. Armed only with accounts at A.O.L. and E*Trade, the kid had bought stock and then, "using multiple fictitious names," posted hundreds of messages on Yahoo Finance message boards recommending that stock to others. He had done this 11 times between September 1999 and February 2000, the S.E.C. said, each time triggering chaos in the stock market. The average daily trading volume of the small companies he dealt in was about 60,000 shares; on the days he posted his messages, volume soared to more than a million shares. More to the point, he had made money. Between September 1999 and February 2000, his smallest one-day gain was $12,000. His biggest was $74,000. Now the kid had agreed to hand over his illicit gains, plus interest, which came to $285,000." http://en.wikipedia.org/wiki/Jonathan_Lebed Actually the article mentions later that he still kept 500K of his winnings, because the SEC didn't dare to prosecute him in curt. The SEC first wanted all of the 800K, his lawyer came back with 125K and eventually they agreed on 285K.
It would do more good if they gave the kid an award. The "Rip Off Master of the Year", something like that. At some point people have to learn it's a very very dumb idea to be taking tips off of chat boards.
phew..wall street does this every day, hunderds(if not thousands) times a day..check any upgrade\downgrade page what?
If you read the article, he only used 4 email addresses and the message was always the same in all 4, so anybody who didn't notice that reserved what they got. On the other hand the kid's teachers were also playing his tips and were making money out of him. http://en.wikipedia.org/wiki/Jonathan_Lebed The original article is a long read, but worthy, because it shows just how incompetent the SEC people were. Eventually they agreed on a lowball fine, because they knew they couldn't win the case in court against him... SEC document: http://www.sec.gov/litigation/admin/33-7891.htm His website now: http://lebed.biz/ I have just checked his last 3 recommendations (all low volume stocks) and they were all winners the next few days....
we know that remember the guy,who was watching the porn all day at SEC? remember what his punishment was? like 1 day dismissal from work. pretty much like a day off. nothing surprise me today. the only thing that really worrisome is that on all gvt levels things got progressively worse for last decade or so.. and there is no end in sight..
So they caught this kid... I wonder what their success rate is in finding and prosecuting such cases. I'm sure this happens all the time. And if the kid had used a proxy server for the emails, they would never have been traced back to him...
I don't think he actually did anything illegal. He gave out unsolicited stock advice, for free. Nothing illegal about that...
totally agree...like i said-SEC always jumps on small guy,weak target,who might give up ride away or don't have enough money(in this fucked up world) to defend himself. rather than go on something really big they pick cases here and there,creating appearance of hard work..typical bureaucratic approach,nothing new here..