Stock picking contests on the internet are not quite working out. Inadequate security systems allowed cheaters to swindle CNBC’s recent content. And last night the TheCheat.com TheStreet.com cancelled the first round of its Beat the Street Competition because some contestants had “employed trading strategies to achieve returns that could not be duplicated in the real world.”*

After the jump, you can read the full memo from TheStreet.com about the cancellation. But we’re curious about what these “trading strategies” might have been. TheStreet.com isn’t giving up the details on these strategies. We’d like to hear what you think.

But to start things off, we polled a couple of our friends for ideas.

“I think the cheaters were trying to exploit irrational spreads between currencies and interests rates without the rest of the world finding out what they were doing,” said a cigar chain-smoker named Jimmy who is mildly obsessed with the collapse of Long-Term Capital.

“Nah. They were definitely trying to listen to some physicist-cum-Quant who had too much access to Excel and tried to use the Riemann Hypothesis to time the energy commodities markets,” said a former Citadel project manager named Trish.

“I’m positive that the plan was to IPO companies using obscure financial valuations based on ‘economic net income’ to reap windfalls,” said guy we’ll just call Steve BlackGuy.

“They were going to invest based on advice they heard on a prominent financial news network between the hours of six and seven in the evening,” said another person who we are making up.

Since you can’t really trade currencies or commodities in the contest, much less IPO a company in the Beat The Street contest, we’re pretty sure none of these are right. And the last is just plain implausible—no one would ever try that idea. So in comments below, we invite you to give us your unworldly trading strategies.

* Disappointingly, the phrase “strategies to achieve returns that could not be duplicated in the real world” has nothing at all to do with the true story, of seven strangers, picked to live in a house, and have their lives taped, to find out what happens when people stop being polite, and start getting real.

[After the jump: TheStreet.com's memo.]

Earlier: Insider Trading At CNBC: The Plot Thickens Imperceptibly

[John Carney contributed to this article.]

From: members@thestreet.com
To: [Redacted]
Subject: An Important Notice about "Beat the Street"
Date: Mon, 11 Jun 2007 14:14:07 -0400

Memo From TheStreet.com
Dear readers:

Since our founding, TheStreet.com has strived to maintain the highest integrity in all of our pursuits. This is especially true with initiatives that involve our readers.

On April 2, TheStreet.com launched its first-ever stock market trading game, "Beat the Street," which ran until May 31. The Game was intended to allow participants to try their hands at stock investing in an environment as realistic as possible, with a cash prize of $100,000.

The final results of the Game indicate that players employed trading strategies to achieve returns that could not be duplicated in the real world, thereby depriving other contestants of an equal chance to win.

To ensure the integrity of future games, TheStreet.com has established additional safeguards to help level the playing field for all participants. Anyone found to be violating the rules will be disqualified.

There will be no cash prize awarded to any players for their participation in the first game. Instead, TheStreet.com will add the money from the first "Beat the Street" game to the grand prize of "Beat the Street 2.0," which will now total $150,000, with players of the second game eligible for additional weekly cash prizes.

I invite you to participate in the soon-to-launch "Beat the Street 2.0" game.

All participants of the first game are eligible to participate in "Beat the Street 2.0."

Good luck with your trades, and please remember to watch for our daily updates on TheStreet.com site.

Let's stay interactive.

Dave Morrow