Call it a family business. On Friday, the Securities and Exchange Commission filed suit against British twins for operating an alleged pump-and-dump scheme.

Since the age of 16, the two brothers, Thomas Edward Hunter and Alexander John Hunter, used an email newsletter and websites to convince customers they were employing a stock-picking robot to predict which penny stocks were about to jump in value, according to the SEC complaint filed in federal court in New York's southern district. In a pump-and-dump scheme, typically perpetrators find a way to inflate the price of a stock artificially in order to cash out themselves.

A lawyer for the SEC, Robert Dodge, declined to comment on the case beyond the complaint. Eric Bruce, a lawyer for the Hunter brothers, did not respond to a request for comment.

"The defendants' characterization of the software led investors to believe that they were receiving stock recommendations based on a complex, statistically-driven analysis," the SEC complaint says. In fact, the SEC says, that stock-picking robot never existed, and the twins were instead promoting stocks that companies paid them to tout.

The complaint goes on to say the Hunter twins hyped the stocks to investors through two main websites: doublingstocks.com and daytradingrobot.com. Then, unbeknownst to the sites' customers, the twins allegedly used a different website, equitypromoter.com, to raise money from companies that wanted the twins to promote their stocks. Thomas Hunter boasted on equitypromoter.com that "one email to this list of people rockets a stock price," according to the SEC.

When the Hunter twins received a payment from companies wanting their stock promoted, the brothers allegedly would issue an advisory on their other websites or via newsletter directing their subscribers to buy those same stocks. "The promoters then took advantage of the increased prices and liquidity by selling their own shares," the complaint alleges. The price of the stocks would often drop shortly after the Hunters recommended that their subscribers invest, according to the SEC, leaving their customers with shares worth less than what they originally paid.

According to the SEC, the twins bilked 75,000 people, mostly in the U.S., out of $1.2 million in the three years that they operated these sites, under an umbrella company called Global Marketing Corp., and also received at least $1.865 million from promoters wanting to tout their stocks.

A report in the Wall Street Journal said last year authorities in the U.K. charged the twins with securities violations and fraud. The Journal says that Alexander Hunter ultimately pleaded guilty to the criminal securities charges, and that U.K. authorities dropped the fraud charges against him and all charges against his brother Thomas.



The scheme began in 2007, but even early on, the twins' sites drew complaints; the SEC first started receiving complaints about the site in 2008, according to the Journal. After the blog sketoac posted a warning about the scheme that year, the Journal says subscribers came forward to complain they'd been bilked. One said he lost $1,000 by subscribing to doublingstocks.com.

The twins claimed the stock-picking robot in "most years is responsible for $4,000,000,000+ Annual Trading Profit," according to the complaint. It says the Hunter brothers called the robot "Marl," and claimed it was developed by two men, one of whom was named Michael Cohen and invented it while a contractor for Goldman Sachs. The complaint says, in fact, there was no Michael Cohen working in that capacity for Goldman.

Both daytradingrobot.com and doublingstocks.com websites have since been taken down.

Shortly after the filing was main public, equitypromoter.com redirected to a site called Smart Penny Stocks whose owner, Jason Abbott, told The Huffington Post that his website is unrelated to the Hunters, and that he "owns a bunch of expired domain names."

As of this posting, the domain name equitypromoter.com seems to have been put up for sale.