The Securities & Exchange Commission (SEC) recently announced that a Los Angeles-based, self-styled “whiz kid” and his company Wealthpire have agreed to pay $1.5 million to settle a complaint alleging violations of Rule 10b-5, that he and his company defrauded subscribers through false statements and misrepresentations.
According to the complaint, Manuel Jesus and his newsletter company Wealthpire, Inc. used advertising materials and websites proclaiming him the “untutored prodigy of stock investing,” going by the alias Manny Backus. Wealthpire materials claimed that Backus made millions before “deciding to help other investors” by starting an alert service to let subscribers copy his trades.
Between January 2012 and September 2014, Backus was apparently not trading in the same stocks recommended by his services as he claimed. He was also not the one making all of the recommendations, either – a man named Robert Joiner was paid by Wealthpire to make all of the stock picks for one service without any input from Backus, and posed as Backus during certain chat room sessions online with investors.
Backus was also accused of making misrepresentations to Wealthpire subscribers, including false claims about one particular stock alert that allegedly made recommendations resulting in returns of over 1400% in the past.
The SEC issued a warning about the use of such “newsletter” services as being used for fraud. Backus and Wealthpire agreed to pay disgorgement of nearly $1.14 million plus interest of nearly $113,000. Backus also agreed to a $235,000 penalty.
Call a Los Angeles Stock Fraud Attorney Today
If you subscribed to Wealthpire, or have questions about a newsletter service you subscribed to offering stock tips, you may have certain legal rights that require your immediate attention.
Contact an experienced Los Angeles stock fraud attorney today for a consultation to discuss your rights and options.