Back in 2014, the Securities and Exchange Commission offered investors a little tip: that (a lot of) investment newsletters are a scam. The regulator told people to be on the look out for newsletters that "promote a stock without properly disclosing compensation received for promoting the stock" as well as false performance claims. It didn't say anything about being skeptical of anyone who describes himself as "the untutored prodigy of stock investing" and throws around the phrase "real money," BUT MAYBE IT SHOULD HAVE.
The Securities and Exchange Commission today announced that a self-proclaimed “stock trading whiz kid” and his stock newsletter company in Los Angeles have agreed to pay nearly $1.5 million to settle charges that they defrauded subscribers through false statements and misrepresentations. According to the SEC’s complaint, Manuel E. Jesus and his newsletter company Wealthpire Inc. used advertising materials and websites touting him as “the untutored prodigy of stock investing” under the alias Manny Backus. A self-purported “math whiz” who boasted a “skyscraping” IQ and training as a professional chess player, Backus claimed to be actively trading in the stock market with ���real money” by age 19. The SEC’s complaint also states that Wealthpire materials claimed that Backus made millions of dollars before “deciding to help other investors” by starting an alert service that let traders copy his every trading move...The SEC’s complaint alleges a series of other misrepresentations to Wealthpire subscribers as well, including false claims about one particular stock alert service that purportedly made historic trading recommendations that yielded huge past returns higher than 1,400 percent.