On September 13, 2016, the SEC announced that it had brought – and simultaneously settled – an action against Wealthpire and Manuel Jesus.
It is important to take the SEC’s Complaint in context, and to realize what it actually says – and almost as importantly, what it does not say. There is no pump and dump. There is no insider trading. There are no rotten-to-the-core bad actors. Indeed, the SEC does not say that Wealthpire and/or Manuel Jesus are complete frauds.
The SEC’s action does nothing to stop Wealthpire’s business, as the SEC’s Complaint does not say there is anything currently wrong with Wealthpire’s business or how Manuel Jesus runs it.
Instead, the SEC has carefully reviewed Wealthpire’s advertising materials, and has laser-pointed to some very narrow, discrete problems. In fact, if you look carefully at the SEC’s allegations, this is not the usual stuff of some horrible scheme to defraud. In reality, of the many Wealthpire products, the SEC’s action is only about three of them: 1) First Hour Trading, 2) Portfolio Crafter, and 3) Consensus Picks.
And the issues addressed are historical only – none of these problems persist today. Importantly, here are the only problems identified by the SEC’s complaint:
First Hour Trading
The Complaint identifies two issues with First Hour Trading:
1) Manuel Jesus, himself, was not actively involved in First Hour Trading, and that instead it was another member of the Wealthpire team, but the materials failed to make that clear.
2) Despite intending disclosure that the “trades” conducted in the First Hour Trading chat room were not actually being placed, but were for illustrative purposes only, the First Hour Trading chat room failed to make those disclosures as completely and as often as possible. As a result, some newsletter purchases may have been misled into believing that the trades were actually being made, when they were not.
It is very important to note that there are no other allegations regarding anything “wrong” with First Hour Trading.
The only problem with this service identified in the Complaint is that it gives the impression that it was Manuel Jesus, himself, who made all of the trading recommendations, rather than another member of the Wealthpire team. That’s it.
This is the only allegation in the Complaint about Portfolio Crafter.
The only issue the Complaint takes with this service is the fact that, from March 2012 until September 2013, the advertising of historical returns for Consensus Picks were significantly overstated.
There are no allegations about anything else wrong with Consensus Picks, and no allegation that any other advertising materials were or are problematic. And importantly, Consensus Picks is still an active Wealthpire product.
In the end, Wealthpire and Manuel Jesus settled this case on a neither admit-nor-deny basis in order to put the matter behind them and to focus on what Wealthpire does best: helping the average street-level investor to succeed in the stock market.