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Second Suit: The SEC Sues America's Prophet for Fraud

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By Tanya Roth, Esq. on March 08, 2010 12:55 PM

He didn't see it coming, which should have been hint number one that "America's Prophet," Sean David Morton, is not really psychic. At least, that is what the Securities and Exchange Commission claims in their suit against him for fraud, filed March 4, in the U.S. District Court for the Southern District of New York.

Hint number two for investors with Morton's Delphi Investment Group should have been that this psychic, allegedly trained by Tibetan monks, did not use his powers to end war or predict earthquakes, but for the very unspiritual purpose of following the market. And not very well, at that. According to The New York Times, the SEC Complaint against Morton states he lured investors beginning in 2006, by claiming would use his psychic expertise to provide guidance to his investing team.

Hint number three: this kind of second sight investing was supposed to garner investors an 117 percent return within five months. Sounds a bit Madoff-y, and we remember how well that turned out.

The SEC further claims that although Morton told investors he would put all of their money into foreign currency, he placed only about $3.2 million of the $6 million he raised into trading accounts. The rest went elsewhere, including a $240,000 investment into the Prophecy Research Institute, a "religious" group set up by Morton and his wife.

Hint Number four: The New York Times reports that 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 the end of the year. According to the SEC, the index fell that year, ending at 8,341. Your ouija board probably has a better track record than Morton.

The Mortons did attempt to ward off the suit by the SEC by filing a suit last year claiming they were the targets of "two (or more) dishonest and incompetent SEC. employees, who apparently need to justify a trip to California in order to visit Disneyland and eat In And Out Burgers at the taxpayers' expense." The suit was dismissed; now who could have predicted that? 

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