You know the emails. We all get them. Shouting at the top of their keyboard lungs, “The Biggest Revelation Since the Internet!” They claim gloom and doom for everyone else, and amazing profits for you if you are only smart enough to get in on the deal before it’s too late. Like me, when you get them you are probably thinking, “Who still reads this stuff?!? They can’t actually be tricking anyone out of their savings anymore…can they?” Well, my mother is a smart woman who, being older, doesn’t even have a computer, let alone an email account, and yet, she called me last night asking me to look something up she saw on the TV.
Mom, yes, this is the legal name of all of our mothers, said she saw a commercial on TV where “They” said “They” had for-casted the downturn in the economy in 2008. They claimed they had for casted the bankruptcy of GM, Fannie Mae, Freddie Mac,and many other institutions, and that the government’s reaction to these financial losses was causing an even greater catastrophe which threatened our entire way of life as Americans. Medicare and Medicaid would instantly become bankrupt as would all social programs in America. Schools, banks, lending, credit cards, all would come to a screeching halt soon, and my mother needed to protect herself now to survive the “end of days!”
Yes, it sounds sensationalist but, in this world wide down economy it is getting a lot easier to believe in catastrophe, so I told her I’d check it out for her. She said she wrote down the website where they would show me a 5 minute video explaining everything and asked that I call her back after viewing the video to see what I thought about it. So, without enthusiasm, I pulled up the website and grudgingly started the video. Was I happy to do it, no. But I always consider the 20 plus years of hardship my mother put into raising me worth a little payback, and I jumped on the website.
After 5 minutes of watching the video, they were still using the “Scare the heck out ‘em” approach and had not Incorporated in to their video one single factoid (a term I use to describe data which has not yet been verified). After 10 minutes of watching the video…same thing. Still gloom and doom with no factoids to verify. So, in lieu of data to verify, I looked up the actual company itself. While I will not publish their name to keep from advertising for them, here is what the Justice Department had to say about them.
“An investment newsletter’s publisher and it’s editor have been hit with $1.5 million in financial penalties after a U.S. federal judge determined they defrauded their own subscribers in a securities scam. They changed their name a couple of times. On October 24, 2005 they changed to it’s current name of…[Name edited]. Beware of a newsletter…” [1]
The article goes further to state that these guys are the kings of the “pump and dump” scam, which I will fully describe in my next blog post, so, stay tuned!
Of course, I called my mother back to warn her off. Her reply, “Maybe that’s why I remember hearing so much about them. I just couldn’t remember what I had heard!” Just because a name sounds really familiar to you, do not think that name recognition is automatically a good thing!
S. David Anton is a member of Public Investors Arbitration Bar Association (PIABA) the preeminent national wide organization of attorneys who represent brokerage firm customers in disputes with the industry. He is also a Certified Securities Arbitrator with the Financial Industry Regulatory Authority (FINRA), formerly NASD and resolves disputes between investors and stockbrokers, investment advisors and their firms. He has been practicing law since 1985 and representing brokerage firm customers since 1999. He is a Tampa, Florida based attorney who can handle securities arbitrations anywhere in the U.S.
FOR A FREE, NO OBLIGATION ANALYSIS OF YOUR POTENTIAL SECURITIES CLAIM CALL THE ANTON LEGAL GROUP AT 813-443-5249.
[1]http://justicedept.com/security/2010/02/16/59-computer-scam/