Last week, after seeing the news of cheating in CNBC’s Million Dollar Portfolio Challenge I was glad I didn’t waste my time with that game. Once I saw that you couldn’t short or trade ETFs and some other restrictions I just decided to not even bother. Not to mention that I didn’t have the time to compete with people like this:

At the peak, the 42-year-old was spending 12 hours a day on the contest, using three computers in his Greenwich Village apartment to trade 1,600 different portfolios, all in an effort to win the $1 million grand prize. He even dropped his studies for the chartered financial analyst (CFA) exam, given once a year, so he could have more time for the financial news channel’s game.

I won’t even go into all the stuff about how you pretty much have to make crazy moves and throw all sensible risk control out of the window to win. While discussing this with my friend Duru, he mentioned that TheStreet.com’s contest had suddenly “disappeared”. He surmised that they probably had cheating issues as well. Turns out he was right:

TheStreet.com said last night that it would cancel the first round of its “Beat the Street” competition because some of the contestants had taken advantage of the system.

The financial news site did not disclose the tactics of the cheats, but it said that all participants of the first contest could enter its next stock picking match. The $100,000 prize money from the canceled contest will be used to increase the amount awarded in the second contest to $150,000.

“Players employed trading strategies to achieve returns that could not be duplicated in the real world, thereby depriving other contestants of an equal chance to win,” David Morrow, the site’s editor in chief, said, in part, in a Web posting to readers. “I invite you to participate in the soon-to-launch ‘Beat the Street 2.0’ game.”

I’ll say those returns couldn’t be duplicated in the real world. The contestants started with $100,000. Here were the top 6 as of May 23rd:

  1. zedesq $717,314,846.60
  2. BuyBuyBuy $244,221,707.49
  3. sdwcheney $32,821,309.13
  4. briankmonkey $26,782,896.74
  5. drumminjen $25,224,044.21
  6. davekrip $16,257,420.07

That’s just insane! I’d like to know if these folks were using the same kind of loophole as the CNBC cheaters. If these companies really want to have a fair contest they should have people ante up real money and use real trading accounts. That will be the day…