DENVER — The Colorado Court of Appeals on Tuesday reaffirmed a summary judgment and restitution order for Marc Mandel of Boulder, known as the self-described “Wizard of Wall Street,” and his company Wall Street Radio Inc.
Mandell had appealed the judgment, refuting the claim that he was operating as an unlicensed investment adviser on either his radio show or via an online auto-trading platform.
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Mandel and the company were the subjects of a summary judgment in August 2015 and were ordered to pay $80,000 in restitution and received a permanent injunction the following October.
Denver District Court Judge Shelley Gilman sided with Colorado Securities Commissioner Gerald Rome’s complaint regarding unlicensed investment advice being offered by Mandel.
A hearing will be set for the court to rule on the relief against Mandel and his company.
The complaint against Mandel asserted that through both his website and individual correspondence with website users, and the people who listen to his radio show, Mandel had been consistently and deliberately offering investment advice to Colorado investors despite not having a license or the legal authority to do so.
Mandel operated as the chairman and chief executive of Wall Street Radio Inc., hosting a nationally syndicated radio program, “Winning on Wall Street,” which was also listed as a defendant.
The Division of Securities, part of the Department of Regulatory Agencies, 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 licensed within Colorado, Mandel began operating a website, www.winningonwallstreet.com, that offered a variety of investment-related services including newsletters, seminars, trading alerts and ideas about how to create and 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 allowed 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 offered a “Master Membership” that, despite disclosing that the company was not a licensed investment adviser, offered “Crystal Ball readings” that provided opinions and advice on potential stock trades and transactions.