He calls himself “America’s Prophet,” a psychic, trained by Nepalese m0onks in the art of time travel, who can foretell the future of the stock market. But to the authorities, Sean David Morton is simply a fraud — and a really, really bad psychic.
The Securities and Exchange Commission (SEC) sued Morton for securities fraud on Thursday, claiming he swindled more than US$6 million from investors by promising them “piles of money” and spiritual happiness.
“I have called ALL the highs and lows of the market giving EXACT DATES for rises and crashes over the last 14 years,” court documents quote Morton as saying.
Next to the Ponzi scheme orchestrated by Bernard Madoff, the Morton case might seem like little more than a footnote in the annals of financial fraud. But the story is so unlike the usual Wall Street fare — it touches on late-night talk radio, a company called Magic Eight Ball and the Dalai Lama — that even in this post-Madoff world it all seems a bit hard to fathom.
By his own reckoning, Morton is a modern-day Nostradamus. According to his Web site, the Dalai Lama sent him to a monastery in Nepal, where a fusion of Eastern spirituality and Western psychic techniques helped him develop the “spiritual remote viewing” system.
He told the Los Angeles Times that he grew up in Texas, the son of a NASA public relations official.
Morton solicited investors through a newsletter with 20,000 subscribers, run through his Delphi Investment Group; his Web site; and his frequent appearances on radio shows like Coast to Coast, a late-night syndicated program focused on the paranormal. He and his wife, Melissa, created three unregistered vehicles for their investors. One was called Magic Eight Ball Distribution.
The SEC named Melissa Morton and a religious organization the couple founded as relief defendants, meaning that the regulator is seeking to retrieve profits from them but has not filed civil charges against either.
According to the SEC, Morton pledged to invest the money he collected with foreign currency traders, who would act according to his psychic revelations. The strategy purportedly earned returns as high as 117 percent over five-month periods.
The reality, the SEC claims, was less impressive — and fraudulent. In court filings, the agency claims that Morton actually deposited only US$3.2 million into the trading accounts. The rest was funneled to various entities, with US$240,000 sent to the Prophecy Research Institute, a nonprofit religious group set up by the Mortons.
His predictions weren’t particularly accurate either. On a Nov. 21, 2001, radio broadcast, Morton predicted that the Dow Jones industrial average would rise between April and June of 2002, cresting at “12,000 or so” by December of that year. According to the SEC, the index fell that year, ending at 8,341.
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