I can recall reading this article by Michael Lewis when it first appeared, but it holds up 6 years later. It is his detailed out of how a 15-year old made the big bucks on Wall Street through day trading — until the SEC cracked down for reasons that are oddly unclear. It also reminds us of one good thing about working at the New York Times. Investigators at the SEC actually call you back and tell you what they are thinking. In this case, it is devasting.
Source link: http://blog.mises.org/7762/jonathan-lebed-criminal-or-just-one-smart-stock-trading-cookie/
Jonathan Lebed: criminal or just one smart stock-trading cookie?
Previous post: Britney, The Paparazzi And Land Socialism
Next post: The Trouble With Child Labor Laws
{ 9 comments }
The comments from Arthur Levitt seem like they’re from the pages of Atlas Shrugged – I know what manipulation is, I worked on Wall Street!
Looks like Lebed is recommending gold as a good investment right now, so he seems to know what he’s saying. Although my comment may be interpreted as manipulation by the SEC!
I especially liked this part:
” Suddenly I realized that the S.E.C. was right: there were victims to be found from Jonathan Lebed’s life on the Internet. They were right here in New Jersey. I turned to Keith. “You’re Jonathan’s victim.”
“Yeah, Keith,” Jonathan said, laughing. “You’re my victim.”
“Nah,” Keith said. “In the stock market, you go in knowing you can lose. We were just doing what Jon was doing, but not doing as good a job at it.” ” I think that last statement pretty much sums it up with regard to talk of “victims”. People on say the Yahoo Finance boards SHOULD know that can(and has been/is) be alot of pump and dump activities online.
It should be THEIR decision whether or not to take the recommendation of such posts seriously and subsequently THEIR risk if they follow the advice in the pump and dump posts(or just online, or for that matter offline, investing advice in general).
Mr. Tucker,
Apparently, Mr. Lebed is still actively trading (good for him!): see his Web site, where I also found the following interesting blog comment on Helicopter Ben, interest rates, and gold!
I just read this for the first time, and a google on Lebed directed me to Jim Cramer saying there was “No Defense for Lebed” (http://www.thestreet.com/p/comment/wrongrear/1326876.html)
Cramer openly admits “I live in a world where people pump and dump all of the time. I live in a world where I have been investigated by the Feds for pumping and dumping, and I never even dumped! And the Feds were right to investigate.”
Later he says, “The Feds, in this case, called Lebed in and tried, in their own cumbersome way, to get the kid to stop. Their way is to grill. The kid didn’t get scared by it. [...] But at some level, the federal government … deserves our respect and our obedience. These guys represent the will of the people, which is to try to do their best to keep me from stealing from you by using securities.” By that logic, shouldn’t Cramer have caved to the will of the SEC (and the people) when the Feds investigated/grilled him?
What a hypocrite.
Through the article, the Feds have that same tone — “we can’t rationally explain what the difference is between Lebed and Wall Street, but we’re the government; you have to trust us.” OK, maybe just “obey us.”
http://uk.youtube.com/watch?v=pvsADU2OOWM
I’m not sure the SEC even understands the situation…If you ask them today, they still cannot pinpoint what this kid did wrong. And why would he not be forced to return all of his profits he is considered a criminal for what he did?!?
http://www.exchangemarket.info
Stock Exchange
As I’ve read the story, there are two main suggestive thoughts. One, that spam is not illegal and two, that whether what Lebed did to gain a small fortune that the SEC considered defrauding the public, Lebed did NO time in jail. So, does that mean when kids read his story and try it for themselves the SEC will not be able to prosecute a minor. The minor & the SEC behind closed doors will negotiate a kick down and the minor will be given a cease & desist letter not to continue this practice for whatever reason the SEC finds it. It’s like a free gift from the government. It’s no wonder why there is so much fraud today especially in real estate of loan modification scams. Perpetrators are just get slapped with a cease and desist order. How bad does a slap on the face from a letter feel?
Comments on this entry are closed.