British twin brothers are at the centre of a hedge fund fraud case involving a “stock-picking robot” that US prosecutors allege was used by the 20 year-olds to con thousands of unwitting investors out of millions of dollars.
Twins Alexander and John Hunter, who were 16 when they set up their alleged fraudulent trading business, face civil court action from the US Securities and Exchange Commission for what it claimed was an internet-based “pump-and-dump scheme”.
Together the Hunters marketed an email stock-picking newsletter to 75,000 subscribers, who were told that its recommendation came from a highly advanced computer program called “Marl” that they described as a “stock-picking robot”.
Marl, which they claimed was designed by former employees of Goldman Sachs who had created a trading programme for the US investment bank that made profits of more than $4bn (£2.5bn) every year, was fictitious.
Instead, the SEC claims the brothers, who received at least $1.2m in annual subscriptions from their followers, merely recommended their subscribers buy penny stocks they were separately being paid millions of dollars to promote.
“While touting their supposed breakthrough investment technology on two websites, the Hunters were racking up fees as stock promoters through a third,” said Thomas Sporkin, chief of the SEC’s office of market intelligence.
In addition to their newletters, the Hunters also offered to sell a downloadable version of their trading programme for $97. Again, this was fictious, and araccording to a memo to software coders sent out by Alexander Hunter, he described the programme as a “fake piece of software”.
“This software does not actually find stocks at all. It should connect to my database and simply request any new stocks I have put in,” Mr Hunter is alleged to have written.
The British authorities froze the Hunters’ bank accounts in 2009, afterwards they began using a Panamanian account.
Read More: Telegraph