- guardian.co.uk, Friday 5 March 2010 16.20 GMT
There are three main schools of thought when it comes to playing the stockmarket. One says study the form of companies and use your judgment to predict their coming performance; the second says just guess and hope for the best; the third says use time travel and psychic powers to look into the future.
Time travel and psychic powers? Well yes, according to Sean David Morton, or "America's Prophet" as he calls himself. His claim to be able to predict with absolute accuracy the movements of the markets based upon his training at the feet of Nepalese monks may sound far-fetched, but it was convincing enough to persuade more than 100 investors to part company with $6 million between 2006 and 2007.
They are not likely to see much of that money back in returns, as the Securities and Exchange Commission that regulates the US stockmarket has just slapped Morton with civil fraud charges, alleging his entire operation was fraudulent. "Morton's self-proclaimed psychic powers were nothing more than a scam to attract investors and steal their money," the SEC said.
According to the SEC indictment, Morton publicised his psychic investing powers in circles most likely to take his brand of hokum seriously. That included late night radio chat shows dedicated to matters paranormal, and a monthly newsletter circulated to 20,000 people.
He claimed he could get returns of up to 117% over five months through his Delphi Associates Investment Group. "I have called ALL the highs and lows of the market, giving EXACT DATES for rises and crashes over the last 14 years," he wrote in the newsletter in July 2006.
The problem was that he actually invested only about a half of the money he received, the SEC alleges. About $240,000 went straight into religious group Prophecy Research Institute, which he runs from his home in Hermosa Beach, California.