Jonathan Lebed

Jonathan G. Lebed was born on September 29, 1984, and raised in Cedar Grove, New Jersey, where he also graduated from Cedar Grove High School. Between August 23, 1999, and February 4, 2000, while still a minor, Lebed engaged in a series of online stock manipulation schemes from his home. He purchased significant blocks of thinly traded microcap stocks and then used internet message boards, primarily Yahoo! Finance, to post numerous false and misleading messages, or “spam,” touting these stocks. These messages included baseless price predictions and claims that stocks were about to “take off” or would be the “next stock to gain 1,000%.” His actions consistently caused spikes in stock prices and trading volumes.

Lebed would acquire between 17% and 46% of the daily volume of a stock. He would then post hundreds of identical messages using multiple fictitious author names, often after the market closed and again the next morning. As stock prices rose in response to his postings, he would sell his entire position, typically within 24 hours of his initial purchase, consistently realizing a profit. Over eleven such transactions, he accrued a net profit of $272,826. A representative instance involved Man Sang Holdings, Inc. (MSHI), where on January 5, 2000, after purchasing 18,000 shares, he posted messages predicting its price would exceed $20 “very soon.” This led to a significant increase in trading volume and price on January 6, 2000, from which Lebed profited $34,959. He repeated this manipulation with MSHI later that month, earning another $37,901.

In September 2000, at age 15, Lebed became the first minor to face proceedings from the U.S. Securities and Exchange Commission (SEC) for stock market fraud. He reached an out-of-court civil settlement, agreeing to pay disgorgement of $272,826 and prejudgment interest of $12,174, totaling $285,000, without admitting or denying the findings. Although he settled for a portion of his earnings, he reportedly kept close to half a million dollars of profit from other trades not pursued by the SEC. In 2003, Lebed made an unsuccessful bid for a seat on the Cedar Grove township council. By 2010, he was living in Wayne, New Jersey, and owned Lebed Biz LLC, a company that operates a website focused on touting penny stocks.