And people wonder why stocks like MPIX etc. are manipulated by crooked MM's etc. Because they can pay $175,000 and subtract that from their $3 million in profits. No teeth just gums and it was not even a slap on the wrist for crooks. Its almost...ALMOST tempting to be dishonest. But then of course I would not be able to sleep and I like sleep.
SEC settles with alleged teenage market manipulators
2013-03-14 13:56 ET - Street Wire
by Mike Caswell
The U.S. Securities and Exchange Commission has reached a $175,000 settlement with the Hunter brothers, the U.K. twins charged over a market manipulation scheme they set up at the age of 16. (All figures are in U.S. dollars.) The brothers, Thomas and Alexander, have agreed to pay civil penalties totalling $175,000 and to injunctions barring future violations. They did not admit to any wrongdoing in settling the case.
The charges the brothers faced stemmed from a "stock picking robot" they created that could purportedly identify highly prospective penny stocks. In reality, the robot simply produced buy recommendations from a list one of the brothers maintained, with promoters paying for spots in the list, the SEC said. The stocks that the brothers recommended included Vancouver-linked OTC Bulletin Board listing Holloman Energy Corp. and Toronto-based OTC-BB listing UOMO Media Inc. (Neither company was accused of any wrongdoing.)
The fines are contained in two judgments entered in New York on March 12, 2013. Alexander Hunter agreed to pay $100,000, while Thomas agreed to pay $75,000. The SEC had originally sought disgorgement of the brothers' profits, after claiming that they received $3-million during the scheme. For reasons not explained in the judgments, the SEC dropped the disgorgement request and agreed to only impose a civil penalty.
16-year-old stock pickers
The SEC originally charged the brothers (who are now 22) on April 20, 2012, when it filed a civil complaint against them in the Southern District of New York. The complaint described a newsletter-type service they ran in 2007 and 2008 that relied on a stock picking robot they called "Marl." They told investors that Marl had been developed by Michael Cohen, a contractor who created a computer trading model for Goldman Sachs. They advertised Marl on their website, which was called doublingstocks.com.
The problem, according to the SEC, was that Marl was a complete fiction. The supposed stock picks that he produced were not based on any technical analysis, and there was no person named Michael Cohen who had worked for Goldman Sachs. Despite the problems with Marl, the brothers attracted 75,000 subscribers in the U.S. who paid $1.2-million in fees to receive his picks, the SEC claimed.
The subscribers, however, were not the largest source of revenue for the brothers, according to the complaint. The brothers ran a parallel service called equitypromoter.com, in which they advertised the ability to "rocket" the price of thinly traded penny stocks. The service catered to penny stock promoters, who paid to have their company inserted into the Marl system, the SEC claimed. The service, as described in the complaint, brought in $1.8-million in fees.
Of the stocks the SEC listed, one of those with the largest gains was UOMO Media, an OTC-BB listing that purports to be a "multi-channel entertainment company." Between May 18 and May 19, 2009, the stock went to $1.06 from 35 cents after a recommendation posted on doublingstocks.com. Its volume went to 20.3 million shares, from 86,000. (By May 22 the stock had fallen to 33 cents. It has since rolled back 1:100, and it was last at 20 cents.)
Another of Marl's picks was Holloman Energy, an oil and gas company that had listed a Calgary office and a Vancouver contact number. On Nov. 6, 2007, the day Marl supposedly said to buy, the stock rose to $1.04 from 94 cents on substantially higher volume of 716,900 shares. (By Nov. 13 the stock had fallen to 70 cents, and it was last at 47 cents.)
The SEC sought disgorgement of profits and appropriate civil penalties. In addition to the brothers, the suit named as a relief defendant a Panamanian company they controlled, Regent Investment Group Corp. As part of the settlement, the judge stayed the case against Regent.
