When we think of traders, we often picture someone like Leonardo DiCaprio's character from "The Wolf of Wall Street" — a seasoned stock market shark. However, reality can be surprising, and in this case, the role of the stock market whiz was taken on by a 13-year-old boy named Jonathan Lebed.
This young boy had been playing the stock market for several years, engaging in small-scale manipulations. However, he truly caught the attention of the law when he earned $800 000 in just six months. How did he manage this, and why is it unlikely for others to replicate his success? Let's delve into his story and schemes that he’d used.
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About Jonathan: Who He Is and How He Emerged
Before understanding how Jonathan earned through trading, let's learn more about him — his upbringing, interests, and mindset. Jonathan Lebed was born on September 29, 1984, in New Jersey, to a middle-level manager and a secretary. Growing up in the suburbs of Cedar Grove, he developed an interest in stock trading thanks to his father.
Jonathan's father combined stock trading with his regular job to make ends meet. During family meals, Jonathan's father would often share his successes and failures in the stock market. Listening attentively, Jonathan became intrigued by the idea of stock manipulation.
Jonathan started exploring financial websites, reading expert opinions, and trying to understand the world of trading. He participated in online discussions and devised trading strategies. It was around this time that he convinced his father to withdraw $8 000 from their account to buy America Online shares at $25 each as a birthday gift for his 12th birthday.
Analysts weren't optimistic about America Online stocks, but Jonathan seemed to have insider knowledge. Within two weeks, each share had gained $5 in value. Lebed sold them and, over the next 18 months, turned his initial $8 000 into a growing capital. Later, he even participated in a CNBC competition for young traders, where his team secured fourth place, and Jonathan gained television exposure.
In this period, Jonathan managed to earn an additional $20 000. Now, the 13-year-old had $28 000, and his father started taking his son's recommendations seriously. Jonathan embarked on more serious endeavors.
How and Where Jonathan Lebed Carried Out His Schemes
Young Lebed created his website, Stock-dogs.com, dedicated to low-liquidity stocks. He continued to give occasional trading recommendations on the site. Many of his suggestions proved successful, enriching those who followed them.
Thanks to Jonathan's expertise, Stock-dogs thrived, attracting up to 1 500 daily visitors. While managing school, trading, and the website without assistance, Jonathan realized people were listening to him and devised a simple stock manipulation scheme.
He continued acquiring low-liquidity stocks and recommending them. Simultaneously, Jonathan started buying "special" stocks, claiming they were undervalued. He promoted these "special" stocks separately, encouraging people to buy them. He purchased a small batch of low-liquidity stocks, making their price appear slightly undervalued compared to others in the same sector, and initiated a PR campaign to support these stocks.
Where did Jonathan carry out these activities? Mainly on forums like Yahoo! Finance and in comments on trader-centric groups and websites. He also promoted stocks on his own site.
To amplify the news, Jonathan created dozens of fake accounts to write false news about the promoted stocks, generating artificial hype. He sent email messages to his website visitors, painting a rosy picture of the selected stocks.
Following a strict routine, Jonathan woke up at 5 a.m., wrote hundreds of fake comments, updated his website with content, and sent out emails. By 8 a.m., as a responsible student, he went to school. Meanwhile, those who believed in his recommendations bought the hyped-up stocks in large quantities. Jonathan did things differently — he waited for his "special" stocks to reach their maximum value and then sold them. He repeated the same scheme with other stocks.
From September 1999 to February 2000, he executed this maneuver 27 times before catching the attention of the Securities and Exchange Commission (SEC), which charged him with stock market manipulations. By that time, Lebed was 15 years old.
How Jonathan Dealt with Authorities
One of the most intriguing aspects of the teenager's story was his response to the accusations: he not only refused to back down but also decided to fight for himself. Lebed launched another PR campaign, this time in support of himself.
The online commotion worked wonders. Jonathan pretended to be an innocent child, and this was only half a lie, considering he was barely 15 years old. He insisted he was innocent, claiming he genuinely recommended buying liquid stocks to friends and website visitors. Furthermore, Jonathan asserted that he himself bought the same stocks as everyone else.
Lebed insisted he never lied because the stocks he recommended did indeed rise in value over time. The subsequent price drops were just typical fluctuations in the stock market. Additionally, nothing prevented those who bought the stocks from selling them at the right time, just like Lebed did.
Many people supported him and rallied to his defense. Fearing trouble due to public pressure, the SEC dropped the case. It never went to trial, as authorities opted for a pre-trial settlement. Under the terms of the agreement dated September 20, 2000, Jonathan could maintain his innocence.
Instead, he had to return money for proven instances of fraud — the compensation amounted to $272,826 plus interest. Even after this, Jonathan still had $515,000 left in his pocket — the income from episodes where fraud couldn't be proven. Remaining in the positive, Jonathan promised not to engage in such activities again. Rumor has it that the teenager earned even more, but none of the deceived individuals filed a civil lawsuit. Who wants to admit being duped by a fifteen-year-old?
Parents' Reaction and Lebed's Success Secret
Children often inherit the best traits from their parents. How else can we explain Jonathan's father proudly responding to his son's federal crime accusation?
"At least," he declared, "Jonathan was seriously working on the Internet instead of wandering around with hooligans, smoking marijuana, and stealing wheels from neighbors' cars."
It's hard to argue with such reasoning.
Jonathan's main success secret, perhaps, lies not in how but when he deceived people — it was the year 1999-2000. People were not adept at being cautious on the Internet, believed almost everything, and knew little about cybersecurity.
Repeating the exact same scam today is unlikely. Back then, the internet wasn't widespread, and those few who had access considered themselves chosen, believing that no one would mislead them online. Nowadays, comments like, "Bought these stocks with my entire deposit!!! I'm sure I'll be in profit within a week! They should start rising soon!" would be seen as suspicious.
What Happened Next and Where is Jonathan Lebed Now?
The website stock-dogs.com is closed and up for sale. Jonathan Lebed became famous and even appeared on a TV show. There, he talked about how trading changed his life and the lives of those around him. Teachers, friends, and Jonathan's parents all earned money following the boy's recommendations and shared his hobby.
In 2003, he launched a site under his own name — lebed.biz. He continues to successfully sell trading recommendations, publish investment advice, and even business ideas. Interestingly, at the time of writing this article, the link to Lebed's site opens a Russian dictionary instead.
Trading and finance experts say that Lebed now works professionally, without fraud, and his advice can be trusted. Jonathan Lebed is now 40 years old. He has achieved a lot and remains actively involved in his passion.
Conclusion
Jonathan Lebed's entire story is a vivid testament that people and emotions, rather than reason and cold calculation, rule money. Most importantly, age is no barrier to wealth. You can earn at any age and anywhere you live. Jonathan Lebed understood this. He shared a common interest with his father, and with age, his hobby grew. Then, the boy simply played his cards right, won over those close to him, and profited from those outside his inner circle. In the end, the boy even emerged unscathed, thanks to his age, intelligence, and the support of parents and friends.
