Self-Proclaimed 'Stock Trading Whiz Kid' Runs Afoul Of The SEC

The SEC said it fined the "stock trading whiz kid" and his newsletter company Wealthpire Inc. $1.5 million to settle charges that customers were defrauded through false statements and misrepresentations.

Jesus operated the newsletter under the alias Manny Backus.

Wealthpire's website says it provides members with two to three stock recommendations each month that have passed a "magic formula" test.

The SEC also alleges that the newsletter's author claimed to have made millions of dollars before "deciding to help other investors." In addition, the author was not trading the same stocks that the newsletter recommended.

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The SEC has previously warned investors that stock picking newsletters can be used as tools for fraud.

"Investors who subscribe to trading alert services are relying on the purported expertise and success of those making the stock recommendations, but Wealthpire and Backus instead circulated repeated lies and falsehoods," said Michele Wein Layne, director of the SEC's Los Angeles Regional Office.

A quick search at various websites that review financial products and services reveal large amounts of customers who were unsatisfied with the newsletter.

For instance, member "randyc" commented on Onlinetradersforum.com, "I have found more negative feedback than positive" and the manager of the service is more of a "marketing genius than an expert trader and is making most of his money in his membership fees than his trading."

Full ratings data available on Benzinga Pro.