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News You Could Do Without

by Mike Masnick

Fri, Oct 20th 2000 12:03pm





Teen Stock Fraud Profitable

from the pay-the-SEC-tax-and-move-on dept

The teenager who was charged with stock fraud by the SEC and ended up paying approximatley $250,000 in a settlement apparently still walked away with around half a million dollars from his activities. So now the SEC is engaging in simply "taxing" people they catch? That's ridiculous. Of course, the kid also points out what I've been saying all along. In reality he did nothing different then many professional investors have been doing: tout a stock until it goes up, then sell. Of course, I don't think that makes it right. I think the SEC should be looking at a lot of the professionals too.

3 Comments | Leave a Comment..


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  1.  

    What did he do wrong again?

    identicon
    mhh5, Oct 20th, 2000 @ 3:29pm

    I'm not sure the kid did anything wrong at all... It seems he said in his emails that you should do your own research. That's exactly what "professionals" do, right? What's the difference? I think I've said this before -- it's only wrong when it's outright fraud and lying. "Embellishing" the truth is a skill. If I say, "stock XYZ has doubled in the last N yrs, and at that rate should be at X by December. (Past performance does not guarantee future results.)" That's totally legit. Now adding all sorts of speculative rumors around that core statement to make it sound more believable shouldn't effect anything... So when does "salesmanship" end?

    [ reply to this | link to this | view in thread ]

  2.  

    Re: What did he do wrong again?

    identicon
    yenz, Oct 22nd, 2000 @ 3:08pm

    from the story:

    The SEC found that Lebed sent email messages under fictitious names. One claimed a company trading at $2 per share would be trading at more than $20 per share "very soon." Other postings claimed a stock would be the "next stock to gain 1,000 percent."

    That certainly doesn't sound "right" to me. Mainstream analysts don't (i hope) make up other "analysts" to back up their claims. (Not that this kid "made" other analysts, but, y'know...)

    [ reply to this | link to this | view in thread ]

  3.  

    Re: What did he do wrong again?

    identicon
    mhh5, Oct 23rd, 2000 @ 1:06am

    While I agree that a "one-man" propaganda machine is a little fishy, I'm sure a lot of press releases are given out in slightly different forms to give the appearance of truth by multiple-source-verifcation. The kid seems to be walking a very fine line between advertizing and playing a con game.

    [ reply to this | link to this | view in thread ]


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