Court rules in favor of Securities Commissioner against “Wizard of Wall Street”
DENVER (Aug. 25, 2015) – Denver District Court Judge Shelley Gilman sided with Colorado Securities Commissioner Gerald Rome’s complaint regarding unlicensed investment advice being offered by Boulder business owner and self-proclaimed “Wizard of Wall Street” Marc Mandel. Mandel operated as the Chairman and CEO of Wall Street Radio, Inc., hosting a nationally syndicated radio program, Winning on Wall Street (WOWS), which is also listed as defendant. The commissioner was represented in court by the Colorado Attorney General’s Office.
The Division of Securities, part of the Department of Regulatory Agencies (DORA), first became aware of Mandel in 2007 when he applied for a license to operate his company as an investment adviser, and to become licensed himself as an investment adviser representative. The division denied Mandel’s request, and Mandel was not allowed to re-apply for licensure for another 10 years, as dictated by the Colorado Securities Act.
Beginning at least as far back as 2012, despite having never been a licensed within Colorado, Mandel began operating a website, www.winningonwallstreet.com, that offers a variety of investment-related services including newsletters, seminars, trading alerts and ideas about how to create an maintain a stock portfolio.
Also in 2012, Mandel began a relationship with Ditto Trade, Inc., a licensed broker-dealer based in Chicago. Through Ditto Trade’s platform, Mandel began leading clients to make securities transactions, and even included a fee-based “Lead Trader Membership” on his website to those who followed and made trades based on his actions on Ditto Trade.
In auto-trading, orders to buy and sell shares of stock or other securities are placed automatically based on an underlying system or program. The WOWS auto-trading membership package allows members to designate Mandel as a “Lead Trader.” Once this authorization is made and funds are deposited, then a trading platform operated by Ditto Trade executes trades on the clients’ behalf whenever Mandel completes his own trades.
Additionally, WOWS offers a “Master Membership” that, despite disclosing that the company is not a licensed investment adviser, offers “Crystal Ball readings” that provide opinions and advice on potential stock trades and transactions.
The complaint against Mandel asserts that through both his website and individual correspondence with website users, and the people who listen to his radio show, Mandel has been consistently and deliberately offering investment advice to Colorado investors despite a lack of licensure and legal authority to do so.
As stated in the claim: “The undisputed facts establish that Mandel and WOWS advised clients, both directly and indirectly, and for compensation, through publications and writings as to the advisability of buys and selling certain securities.”
“This is an important ruling for our office,” stated Commissioner Rome. “The court agreed with us that auto-trading is providing investment advice. Licensure of financial professionals is a crucial component of investor protection and ensures a level playing field for all investment advisers. This case required a lot of diligent research and effort both on the part of my team, as well as the team at the Attorney General’s Office. We appreciate the work of Assistant Attorney General Jennifer Hunt and Deputy Attorney General Russel Klein who successfully argued our case.”
A hearing will now be set whereby the court will rule on the appropriate relief against Mandel and Winning on Wall Street.
Division of Securities