The BBC reports on an interesting example of a very modern scam: US charges British twins over $1.2m ‘stock robot’ fraud.
The scam had two parts. For investors, there was the the “stock picking robot” called Marl, which supposedly told you which stocks to buy. You could buy a copy of Marl for $28,000 – or get a newsletter featuring Marl’s wisdom, for just $47.
In reality Marl didn’t pick anything. The stock tips were provided by the teenage scammers, the Hunters, themselves. Not because they thought they were good stocks, but because the companies behind the stocks paid the Hunters fees for their promotional services via a separate “equitypromoter.com”.
What’s interesting about the scheme is that everything “worked”, just not the way it was meant to. Investors paid to get tips as to what stocks would rise; they did rise, just not for the reasons they thought.
So Marl was a lot like one of those quack treatments in medicine, that claim to treat a certain disease, and do indeed make people who take it feel better, but – contrary to what they claim – through the placebo effect.
There’s other similarities too, as you can find out on the rather fascinating good-stocks.com site which helped sell Marl. Like many quack treatments it had:
- An elaborate ‘mechanism of action’ that blinds with science – Marl uses an “evolutionary framework”to “Develop what professional traders call a ‘sixth sense'” and can “process 1,986,832 mathematical calculations per second.”
- Lots of amazing success stories and testimonials from satisfied customers
- An attractive creation myth – Marl was invented by “Two Uber Geeks” who both had a record of success in more conventional stock trading, but unlike their conventional colleagues, were able to invent Marl by thinking outside the box; this is reminiscent of the many quacks who simultaneously flout their medical or academic qualifications while accusing medicine and academia of ignoring them.