Court rules against ‘Wizard of Wall Street’ on securities violations

DENVER — A Denver district court judge has sided with the state’s securities commissioner that Marc Mandel of Boulder, the self-proclaimed Wizard of Wall Street, provided investment advice without being licensed, the Colorado Division of Securities announced Tuesday.

Mandel operated as the chairman and chief executive of Wall Street Radio Inc., hosting a nationally syndicated radio program, Winning on Wall Street, which also was listed as a defendant.

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 without a license.

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A hearing will be set for the court to rule on the appropriate relief against Mandel and Winning on Wall Street.

The Division of Securities, part of the Department of Regulatory Agencies, 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 reapply for licensure for another 10 years, as dictated by the Colorado Securities Act.

Beginning at least as far back as 2012, 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 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 radio program’s 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, the radio program, 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.

“This is an important ruling for our office,” Rome said in a prepared statement. “The court agreed with us that auto-trading is providing investment advice.”