As Jacob Wohl Files Response, A Different "Twitter Trader" Is Busted By FBI – ValueWalk Premium

As Jacob Wohl Files Response, A Different "Twitter Trader" Is Busted By FBI

Young Jacob Wohl, the 19-year old hedge fund trader who claimed to have started trading as young as ten years of age, has requested a hearing with the Arizona Corporation Commission Securities Division, ValueWalk has learned. The developments in the Wohl case, where he faces reparations and fines in excess of $100,000 regarding investment fraud charges, come as 26-year-old Chicago trader Randall Rye faces criminal charges of investment fraud for misappropriation of investor funds.

Randall Rye

Randall Rye

While Wohl was perhaps best known for his numerous media appearances – he recently told Vice News that “the market is just an easy way to exploit people’s psychological failures and make money” – Rye found Twitter to be his path to popularity, amassing 63,600 followers.

Randall Rye – Allegations

Rye’s Twitter account, which has gone dormant as of January 6, claims that he trades options and futures and is “traveling someplace tropical.” The Chicago FBI, however, said in an indictment that carried eight counts of wire fraud that Rye falsified account statements to investors and claimed that his algorithmic trading system was profitable, both claims investigators said were false in what they characterized as a “Ponzi-type” scheme that defrauded investors of $1.5 million.

The aspect of the Twitter handle that may be accurate involves Rye’s travels. “In reality, Rye misappropriated the investors’ funds for his own personal expenses, such as air and hotel travel costs, including vacations to St. Lucia and Bali, tickets to sporting events, including the World Series and the Masters golf tournament, and on other luxury items and large cash withdrawals,” the indictment says.

Like Wohl, Rye and his firm, “Faster Than Light Trading LLC,” was registered with the National Futures Association for a short period of time – in Rye’s case from August 22, 2016 to November 21, 2016. Likewise, Rye is accused of delaying payments after investors requested redemptions, as the Department of Justice indictment explains:

It was further part of the scheme that defendant RYE created and sent fake wire transfer sheets to certain investors that purported to be from Citibank, and that falsely stated he had requested a wire transfer of funds to the investors and that he had approximately $38 million in that account. For example, on or about January 12, 2017, RYE provided Investor MR with three fake wire transfer requests purportedly showing that he had sent a total of $200,000 from his Citibank account and noting a balance of approximately $38 million in the account. RYE knew that these fake wire transfer requests were fraudulently designed to stall investors that were demanding withdrawal of their funds.

Investigators could decide Wohl’s fate March 28

While there have been no criminal charges filed against Wohl, Rye could face a maximum penalty of 20 years in prison for each count of wire fraud.

Wohl, for his part, responded to Arizona regulators, claiming he “was not provided with any notice that your commission would be seeking restitution, fines or penalties of any kind.” The State of Arizona, however, claims they sent the initial notice to Wohl’s office and have a signed receipt from his partner, Matt Johnson.

Earlier this week the Arizona Corporation Commission Securities Division set a Pre-Conference hearing for March 28 when its commissioners will determine if Wohl will be given a hearing. If not the regulator’s original judgment would become the ruling, which mandates that Wohl and Johnson pay restitution of $32,918.72 and fines of $5,000 for each violation of securities law, as well as $1,000 for each violation of the state’s IM Act. All told, Wohl could be mandated to pay over $100,000 as a result of the legal proceedings, a number that could grow if other states file similar charges.


Saved Articles

Here’s a Tip: Read What Professional Investors Read

ValueWalk Premium is for investors looking to improve their investment process AND keep up-to-date on the latest industry trends.

It’s THE resource for value investing and hedge funds. 📈

And with a free three-day trial and $29.99 per month thereafter, it’s a value in its own right.

Sign up now. 👇