By Ben Dell’Orto Student Intern Fall 2018
These days, anybody can create a website. Sometimes it’s even a really good one.
A few alleged fraudsters were able to create a fake day-trading website called Nonko Trading. The website claimed that investors could operate their own investment accounts, trading investments on the market in a similar fashion to a website like E*TRADE. However while E*TRADE allows investors to take the reins on their own portfolio (albeit in a tremendously risky fashion), Nonko allegedly simply took the money and ran.
According to the SEC, the website “simulated” a day-trading site, with customers operating an empty account they believed was gaining or losing value. The fraudsters used a ponzi-like scheme where Nonko took the deposits from would-be investors and used some of that money to pay off individuals who attempted to withdraw money.
The company ultimately allegedly defrauded investors of $1.4 million. While the SEC arrested two people on September 5, Jeffrey Goldman of West Bloomfield, Michigan, and Christopher Eikenberry of Birmingham, Michigan, the agency charged four others as of May 2017. By September, a New Jersey District Court had already entered a judgment against one of the operators.
So what’s the lesson here? A little research goes a long way. While the SEC initially went after Nonko in late 2016, some murmurs about the legitimacy of the website already existed. A simple Google search would have revealed the linked tweet, and while such a website isn’t appropriate for investment advice, it doesn’t hurt to see what people are saying if a website seems a little sketchy.
Remember: it’s easy to make a website.