MANHATTAN (CN) - Since they were 16, British twin brothers - now 20 - bilked mostly U.S. investors for more than $1.8 million by claiming they had a "stock picking robot," the SEC claims in Federal Court.
The SEC sued Thomas Edward Hunter, Alexander John Hunter, and Regency Investment Group Corp., seeking disgorgement, penalties and an injunction.
"Starting at the age of sixteen, the defendants, twin brothers Alexander John Hunter and Thomas Edward Hunter, developed an elaborate scheme to manipulate the prices of penny stocks at the expense of unwitting investors," the SEC says in its complaint. "The Hunters concocted and hyped the tale of a 'stock picking robot' that they claimed could identify penny stocks that were poised to appreciate sharply in value. In their email newsletters and websites (doublingstocks.com and daytradingrobot.com), the defendants represented that the 'robot' was a highly sophisticated computer trading program and the product of extensive research and development.
"The defendants' story was persuasive. Approximately 75,000 investors, the vast majority of whom lived in the United States, paid at least $1,200,000 for annual subscriptions to the Doubling Stocks newsletter and copies of the robot software.
"In reality, the 'stock picking robot' was a work of fiction. The stock recommendations the defendants sent to their subscribers were not generated by any technical analysis. The stocks were instead those that the defendants had been paid by other promoters to tout. Unknown to their subscriber victims, the defendants maintained a separate web-based business under the name equitypromoter.com in which they offered their services as stock touters. On the equitypromoter.com website, the defendants claimed that their investor newsletters could cause a stock's price and volume to 'rocket.' The defendants received at least $1,865,000 in fees from stock promoters for their stock touting services. The defendants never disclosed to their investor victims the relationship between their two lines of business."
Boys, boys, the SEC says. Don't do that. Both live in the United Kingdom and both owned and operated relief defendant Global Marketing Corporation Ltd. Defendant Regency is a Panamanian corporation.
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