Watch Out for Stock-Picking Robots!

Imagine a super-intelligent robot that could find obscure penny stocks that were about to appreciate significantly in value. Imagine it learned more with every stock, with every trade, with every movement of the market, so that its predictions became more and more accurate over time. Would you pay that robot to make stock recommendations to you?

It turns out a lot of people would. In fact, a lot of people did. According to the Securities and Exchange Commission, people paid over $1.2 million to twin brothers who are now accused of hatching a scheme to defraud investors.

The SEC claims that John and Thomas Hunter set up stock-picking websites and newsletters to promote a fictitious stock-picking robot named Marl with a genius for selecting penny stocks. The Hunter brothers allegedly took money from stock promoters who paid to have their stocks featured as Marl's selections—a new Internet twist on the old pump-and-dump scheme, in which investors in the know load up on a stock before the price goes up and dump the shares when new investors come in.

How do you avoid becoming the victim of a fraudulent penny stock-picking scheme? First and most importantly, don't trust promises that a robot with artificial intelligence can effectively predict the future. Second, as a general rule, be very skeptical of any claim you find on the Internet that you can get rich with little to no effort. Get-rich-quick schemes have been around forever; just because they're being touted on a website doesn't mean that they're legitimate.

And last, if you're ever in doubt about whether a particular website is to be trusted or not, it can help to have the opinion of an impartial expert. And that's where Trend Micro can help. Our Web reputation technology tracks the credibility of websites and pages to help identify dangerous sites before you visit them.

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