U.S. financial regulators said on Monday they had uncovered a fraudulent $1 million Internet securities scheme they alleged was run by a 17-year-old high school student.
Cole Bartiromo defrauded 1,000 investors through a Web site and Internet bulletin board that promised guaranteed and risk-free investments, the Securities and Exchange Commission said in a statement.
Bartiromo, who lives with his parents in Mission Viejo, California, has settled the case and agreed to turn over about $900,000 of investor money he had transferred into an account he controlled at a Costa Rican casino, the SEC said.
Further litigation is pending regarding civil penalties, the SEC said.
His lawyer did not immediately return calls for comment.
The financial regulator originally filed a complaint with the U.S. District Court for the Southern District of New York on Dec. 13 after discovering the scheme, but at that time the SEC did not know who was behind it.
"We followed the financial trail to what appeared to be a kid in Southern California, and then to the money in Costa Rica," SEC lawyer Alexander Vasilescu said.
The Web site promised exorbitant returns on short-term investments, including a "Christmas Miracle" program that promised a return of 2,500 percent for money invested between Nov. 10 and Dec. 15 last year, the SEC said in its complaint.
News source: Reuters - Teen Made $1 Million in Internet Investment Scheme
Cole Bartiromo defrauded 1,000 investors through a Web site and Internet bulletin board that promised guaranteed and risk-free investments, the Securities and Exchange Commission said in a statement.
Bartiromo, who lives with his parents in Mission Viejo, California, has settled the case and agreed to turn over about $900,000 of investor money he had transferred into an account he controlled at a Costa Rican casino, the SEC said.
Further litigation is pending regarding civil penalties, the SEC said.
His lawyer did not immediately return calls for comment.
The financial regulator originally filed a complaint with the U.S. District Court for the Southern District of New York on Dec. 13 after discovering the scheme, but at that time the SEC did not know who was behind it.
"We followed the financial trail to what appeared to be a kid in Southern California, and then to the money in Costa Rica," SEC lawyer Alexander Vasilescu said.
The Web site promised exorbitant returns on short-term investments, including a "Christmas Miracle" program that promised a return of 2,500 percent for money invested between Nov. 10 and Dec. 15 last year, the SEC said in its complaint.
News source: Reuters - Teen Made $1 Million in Internet Investment Scheme
Bulletin boards were also maintained on Microsoft Corp.'s MSN Networks Communities, the SEC said, with messages that solicited investors.
When people who lost money started posting messages complaining about the investments, the messages were removed, the SEC said.
The investment was to pool investor funds to place "safe bets" on three online sportsbooks, the SEC said.
Potential investors sent their money through Internet payments services like PayPal and Osgold, the SEC said.
Bartiromo isn't the youngest person the SEC has targeted for Internet securities fraud.
Two years ago, the regulator accused 15-year-old Jonathan Lebed of using the Internet to manipulate stock prices, saying the teenager touted the stock of small companies by posting notes on message boards on well-known Web sites.
The New Jersey teen settled the case without admitting or denying guilt and agreed to pay more than $272,000 in profits to settle the civil lawsuit.
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