British twin brothers have swindled "unwitting investors" in the U.S. out of more than $1.2 million by promising riches via their stock-picking robot named "Marl," according to the Securities and Exchange Commission.

The commission filed a lawsuit (.pdf) Friday against John and Thomas Hunter, who allegedly began the scheme in 2007 when they were 16. According to the suit, the pair "concocted and hyped the tale of a 'stock-picking robot' that they claimed could identify penny stocks that were poised to appreciate sharply in value."

On their websites, doublingstocks.com and daytradingrobot.com, and in newsletters, the Hunter brothers claimed the robot was a "sophisticated computer trading program and the product of extensive research and development," the SEC said in a New York federal lawsuit, which seeks to seize the pair's profits. At least 75,000 investors paid a combined $1.2 million for $47 annual subscriptions to the Doubling Stocks newsletter or $97 for copies of the robot software, the SEC said.

"In reality, the 'stock picking robot' was a work of fiction," the SEC said in a court filing.

On their doublingstocks.com website, the defendants referred to the stock-picking robot as "Marl", combining the first names of its purported inventors, Michael Cohen and Carl Williamson, the SEC said.

On doublingstocks.com, according to the SEC, the defendants falsely claimed that Cohen "developed the famous 'Global Alpha' computer stock trading model" as a contractor for Goldman Sachs. The Global Alpha program, the defendants falsely claimed, in "most years is responsible for $4,000,000,000+ Annual Trading Profit," the SEC said.

Investors were led to believe that stock recommendations were based on a complex, "statistically driven analysis," the SEC said.

But instead, the robot's picks were part of a so-called "pump-and-dump" scheme, the SEC said.

The defendants received an estimated $1.8 million from stock promoters the SEC did not name, the SEC said. The robot would tout the promoter's stocks. The promoters would then "dump" or sell their shares after "Marl" the robot instructed the twins' customers to buy shares, the SEC said.

"In most cases, the stock corrected downward quickly, leaving investors with shares worth less than when they purchased earlier in the day," the SEC said.

The government said that, in seeking bids from software coders in 2007 to produce the home version of "Marl," defendant John Hunter described the program to freelance software coders as one "which will appear to the user that once running, it is analyzing thousands of penny stocks," the SEC said.

The SEC added that the description to coders said, "This software does not actually find stocks at all. It should connect to my database and simply request any new stocks I have put in."

The twins' Washington, D.C., lawyer, Eric Bruce, did not immediately return a phone call seeking comment.