Apparently, Committing Fraud is a Hobby!
Frauds. We’ve all heard of them. We see it in the news and quite frankly, we despise it. Frauds of all kinds are disliked by everyone (except the people who commit them). One of them being stock market fraud.
Stock market fraud requires some level of smarts in comparison to the rest of the categories of fraud. The amount of effort and planning that goes into this is even applaudable to some extent. However, we’re not here to praise and celebrate crime. This blog is anti-crime.
Just think about it, if the time and patience poured into coming up with such transgressions was redirected into something productive altogether then, that would’ve made the life of the individual committing a felony at least five times better.
However, here we are to talk about one such individual, a 15-year-old to be specific. Jonathan Lebed. This guy is the first minor in the history of committing stock market fraud.
Progression of the occurrence
The year 1999 was the year when Jonathan found his hobby. He indulged himself in this activity. Jonathan Lebed wreaked havoc on the stock market in 2000. This 15-year-old youngster was charged with “pump and dump” stock trading online. A pump-and-dump plan is an unlawful way to boost the price of a stock or investment using false, deceptive, or excessively overstated assertions. Typically, micro- and small-cap stocks are the focus of pump-and-dump scams.
Jonathan’s activities demonstrated how effective a tool the internet can be for fraud. This instance clearly demonstrates the necessity for investors to scrutinize the information they are receiving online because it is posted there by a variety of people, some of whom may have ulterior motives.
If we were to view this prank that made news, the endeavors of Jonathan Lebed and those of a certified financial analyst are hardly distinguishable from one another. Every day, market forecasts are made by financial analysts, some of which are accurate while others are not. These forecasts are based on stock market analysis performed by financial analysts. Numerous experts hold divergent opinions about the same stocks. However, nobody can tell whose predictions are accurate until the stock market’s outcomes are made public. Jonathan Lebed made his forecast based on his assessment of the stock performance. The only things that set him apart from the financial expert were his age and lack of a college degree.
Financial analysts are prohibited from investing in the companies they recommend. However, their customers are free to base their investment choices on their analyst forecasts. Despite the fact that some of these financial expert forecasts are way off the actual stock market performance, they are not penalized for their forecasting mistakes. Nonetheless, Jonathan Lebed was fined over $300,000 for his acts. His goof-up was investing in the companies he advised other people to.
Grand Finale
Lebed was the SEC’s first juvenile to face charges. Lebed and the SEC struck an out-of-court settlement in 2001 that allowed Lebed to keep nearly $500,000 in exchange for Lebed forfeiting $285,000 in profit and interest on 11 trades he made without admitting any wrongdoing.
Personally, if he were to maintain his intrigue in the stock market, then he too would one day make a fine financial analyst. However, he brought it upon himself by committing a fraud. He would certainly be tainted as a bad person in society.
Now, he could be let off with a pat on the wrist as a child who did not know what he was doing. However, he would have taken the law for granted and done something much worse in the future. Learning to take responsibility and having to face consequences help shape us into better mortals.
On the contrary, he also got to keep almost half the money that he earned from his so-called “job” which in hindsight left him with more money than he had initially. So, I guess, the moral of the story is to commit fraud, and you’ll get out richer even if you get caught (Not REAL Advice).
Wait.
That’s not the lesson we want to take from this incident. I just want to reiterate the fact that this instance would have concluded if it had been approached differently. If you were to judge the situation, what would be your 2 cents? Would you approach this any differently than what actually happened?
