You may have seen the amazing story today about the high school kid who made $72 million trading stocks. There were plenty of red flags in the original New York Magazine article. But now CNBC is reporting that the $72 million figure is totally bogus.
Mohammed Islam, a 17-year-old high school kid in New York, was profiled as a Wall Street whiz kid who was raking in millions. The New York Magazine piece implies that his wealth ($72 million or not) largely came from trading.
Mo got into trading oil and gold, and his bank account grew. Though he is shy about the $72 million number, he confirmed his net worth is in the "high eight figures." More than enough to rent an apartment in Manhattan—though his parents won't let him live in it until he turns 18—and acquire a BMW, which he can't drive because he doesn't yet have a license.
But the investment club that Islam belongs to sent a statement to Business Insider:
It has been brought to the attention of the Leaders Investment Club that Mohammed Islam has been rumored to have made $72,000,000 through making trades in the stock market. After performing due diligence and talking with Mohammed Islam himself, we have determined that these claims are false and simply been blown up by the media in the interests of sensationalism.
The journalist who wrote the piece defends it, saying that she saw a bank statement that confirms he's worth eight figures:
So what's the real story? We can only speculate at this point, but if history is any guide for Wall Street prodigy stories, most of his wealth could come from an inheritance. Just last month Yahoo Finance had to issue a correction about the story of a 27-year-old "self-made" millionaire. It turned out that probably 80 percent of that man's wealth came from an inheritance.
You can watch video of CNBC discussing the story of Mohammed Islam, the high school millionaire, below:
All this doesn't mean that Islam isn't still making decent coin from his trading, nor that he's not incredibly wealthy. He's just not worth $72 million and almost certainly didn't make the majority of his money trading stocks.
We'll have to wait until the dust settles for the real story on this one, but that could take a while. Islam cancelled an appearance on CNBC after getting spooked by producers in his pre-interview.
Update: New York Magazine has now included an editor's note that says they saw documents verifying that Islam is "worth eight figures" but have seen nothing to verify how much he's made through trading:
Editor's 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 he's worth eight figures.
Update 2: Well, now it turns out that the kid made the whole thing up. He didn't make a dime from trading. He doesn't even have "eight figures" from some inheritance or something. The New York Observer talked with Islam in an exclusive interview last night.
You seem to be quoted saying "eight figures." That's not true, is it?
No, it is not true.
Is there ANY figure? Have you invested and made returns at all?
So it's total fiction?
Are you interested in investing? How did you get this reputation?
I run an investment club at Stuy High which does only simulated trades.
If you had been playing with real money, would you have done really well?
The simulated trades percentage was extremely high relative to the S&P.
Where did Jessica Pressler come up with the $72 million figure?
I honestly don't know. The number's a rumor.
She said 'have you made $72 million'?
[I led her to believe] I had made even more than $72 million on the simulated trades.
I actually feel pretty sorry for the kid. Later in the interview he tells the Observer that his parents want to disown him for lying. He was just being a dumb 17-year-old making up stories and this one just really got away from him. Poor guy. New York Magazine looks pretty bad here for setting off this international story.