Twins accused of scamming thousands with robot ploy

A pair of British brothers are facing charges in the United States for allegedly defrauding investors out of more than $1.2 million (£745,000) through a stock market scam.

Twins Alexander and Thomas Hunter, reportedly from Whitley Bay, North Tyneside, were just 16 years old when they devised the "elaborate" online scam.

In 2007, the brothers allegedly invented a fictitious "stock picking robot" and claimed on a series of websites that it could identify stocks that were poised to rocket in value.

They then targeted thousands of unsuspecting investors, mainly in the US, selling them "home versions" of the bogus software - called 'Marl' - as well as a subscription to a newsletter that listed the robot's stock recommendations, it is alleged.

In fact, the stock recommendations were not generated by any technical analysis and were determined by which companies paid the brothers for promotion in their newsletters, according to the US Securities and Exchange Commission (SEC), who has brought the civil action.

The case filed against the Hunter twins alleges that investors paid $47 for the newsletters and $97 for the home software. The twins promoted the scam on websites such as doublingstocks.com, which claimed the robot's forecasts earned returns of 34% per week.

Meanwhile, the Hunters, now 20, received at least an additional $1.86 million (£1.15m) in fees from stock promoters for their touting services, which was advertised on website equitypromoter.com.

The site boasted of the brother's ability to "rocket" the price and volume of thinly traded penny stock issuers.

Once a company was reeled in by the scam, the twins would then send an email to the thousands of investors subscribed to their newsletter, recommending they buy the touted asset.

And once investors followed the bogus advice the shares value and volume would instantly increase.

The SEC is seeking permanent injunctions against the pair to prevent them from continuing to engage in securities fraud and an order requiring them to hand over their ill-gotten gains, which were allegedly collected in UK and offshore bank accounts.