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.