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Last month, fifteen-year-old Jonathan Lebed became the youngest person to be accused of securities fraud by the Securities and Exchange Commission (SEC). The New Jersey high school student paid $285,000 to settle stock manipulation charges relating to eleven trades. However, according to CBS, he made about $800,000 from sixteen trades that were not investigated by the SEC. Lebed, who was a finalist in a CNBC stock-picking contest three years earlier, used a "pump-and-dump" method in which he bought shares of an inexpensive stock, used online stock trading bulletin boards to hype his stock, and then, after the price of the stock rose, sold it at a profit. In its press release on the case, the SEC claimed that Lebed used "multiple fictitious author names for the hundreds of identical messages he posted during each manipulation" mainly to a variety of Yahoo! Finance message boards. Lebed posted that one of his stocks was "the most undervalued stock ever" and would be the "next stock to gain 1000 percent." Although he did not admit or deny the charges brought by the SEC, Lebed repayed the US Treasury his profits, plus $12,174 in interest, bringing the total sum to $285,000. In an interview with 60 Minutes, Lebed stated, "Yes, [I manipulated stocks], but I wasn't doing anything wrong . . . I wasn't posting any kind of false information." However, SEC chairman Arthur Levitt disagreed. "He used fictitious names. He made predictions ... without any foundation," says Levitt, "The purpose ... was not to help investors ... but rather to line his own pockets as soon as he hyped the price of the stock."
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