Another day, another journalistic scandal. Two weeks after Rolling Stone retracted its story of a gruesome sexual assault on the campus of the University of Virginia, New York magazine is now walking back its story of a Stuyvesant high school junior who claimed that he earned $72 million while trading on his lunch break.
The young man in question, Mohammed Islam, admitted to CNBC that the number was inflated and later to The New York Observer that he and his friends had made the whole thing up. Although New York magazine has not removed the story from its website, it has amended its Reasons to Love New York headline – it now reads Because a Stuyvesant Senior Made Millions Picking Stocks. His Hedge Fund Opens As Soon As He Turns 18. New York editors also added the following not-quite correction at the bottom of its story written by Jessica Pressler:
Editors note: Mohammed Islam has denied that he made $72 million on the stock market. Our story portrays the $72 million figure as a rumor; the initial headline has been changed to more clearly reflect the fact that we did not know the exact figure he has made in trades. However, Mohammed provided bank statements that showed he is worth eight figures, and he confirmed on the record that hes worth eight figures.
One reader of Traders thought that something was odd with the initial story. He wrote to us:
If the kid started from near zero and made $72 million over 8 years he would have to generate about $36,000 in profits each – EVERY – day. Put another way, he would have to have a cumulative annual return over the period of over 200%! And he was trading at lunch hour? Not exactly at time known for volatility. Seems like we’re missing a lot of the facts here. Story also appears highly suspect.
Good points.
Traders ran its story about the New York magazine piece because we thought it was interesting and the hype reminded us of the days of the dot-com era and before the collapse of the markets in 2008. The quotes and allusion to The Wolf of Wall Street also peaked our interest, as in who in their right mind would invest in these kids? New York magazine does not name the hedge fund manager who wanted to invest $150 million in the teens even as it stands by Islams plans to open a hedge fund.
We certainly hope that Islam and his buddies are truly contrite and have learned from their lessons. Study, graduate, donate some money to charity and go to a good school sounds like a good plan of action for this crew. If this is their only ethics violation, they might have a long career as a trader and portfolio manager.
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Not every young trader has trouble with the truth. Last spring, Traders profiled ayoung quant trader fresh from UC Berkeleyand lists thetop quantiative trading schoolsof 2014.
