Is Porter Stansberry a fraud?
by captshnuff | January 21, 2014 2:22 pm
I believe, and have long believed, that Porter Stansberry[1] is a blatant, scare-mongering fraud. I’m surprised, Travis, that you even include his oft-wacky meanderings. Google ”porter stansberry fraud” and it might make one wonder…
Endnotes:
- Porter Stansberry: https://www.stockgumshoe.com/tag/porter-stansberry/
Source URL: https://www.stockgumshoe.com/2014/01/microblog-is-porter-stansberry-a-fraud/
We delight in covering the wacky. The more often wacky and the more ridiculous the promise or the “secret”, the better.
Porter’s organization is bigger than most and they have pushed the envelope on hype-y “secret” teaser pitches more than most (Porter says his firm invented the “video presentation” ad that so plagues us today, among other things), and the SEC did get a fraud conviction against Porter and his firm based on a 2003 teaser pitch in which he apparently claimed insider info and sold a report based on that insider info (the source, I think it was at USEC, said it had given him no such info, which seems to have been a key). In terms of his current advertising, I wouldn’t say that it appears to me to be particularly bad or different in the universe of newsletter pitches — I think all the newsletter publishers of any size are now far more careful about the promises they make, with more qualifiers and “maybes” and “should” and “might not work for you” language, they tend to follow the same script and, probably, get advice from the same lawyers.
Travis, You may be interested in my most recent experience with S&A. I’ve been a subscriber to the SIA for more than three years, primarily interested in keeping abreast of Porter’s unique and mostly interesting assessment of the markets, etc. As you alluded to, his firm markets their products most aggressively. After being deluged with an incessant number of emails (at least a dozen or more) soliciting one of their more expensive services (which frankly I could not implement anyway because it requires selling puts which is denied me in my accounts), but even more egregious, being personally ridiculed for not taking advantage of their offer, I complained to Stansberry Research in rather strong terms. Their response was to cancel outright my subscription to SIA and refund the unused balance (about 10 months). I know that they are a large outfit and I’m small potatoes, but I still find this a strange way to do business; or more accurately, an incredibly arrogant way to do business. So, anyone who currently has subcriptions or is considering subscribing may want to reconsider the arrogance in advertising and their subscriber retention practices before committing any funds to this publishing behemoth, which apparently cares very little about the little guy. So I will have absolutely nothing kind to say about nor to do with Stansberry & Associates and would recommend a similar approach to everyone else. And Please, don’t encourage them with a subscription!
Thanks Ronald — like most places I imagine it’s a bit of an echo chamber at S&A, part of their shtick is that they’re arrogant because they’re right (and indeed, part of Porter’s specific ad spiel in the past is that you should subscribe even though he’s an as***le. He’s a fine guy in person when I’ve met him, though he certainly cultivates the arrogant air.)
What about his 2011 predictions of Germany leaving EU, dollar losing reserve status and advising to go 50/50 cash gold ?
Well, the “interesting” thing about all the various newsletter writers and their advertising hacks – at Stansberry & Associates, Oxford Club (for their “premium services”), Angel Publishing, etc – is that they NEVER seem to own up to it when their grand predictions don’t pan out. It’s simply part of the “industry”…they just come up with more and “grander” ones. I forget what Porter’s “grand apocalyptic certainty” was for last July – but never happened. Never stopped him for a second. (It seems that Baltimore is home to a huge percentage of the loudest hyper shouters – don’t know if they are all offshoots of Agora, or something about Baltimore just attracts a certain type of “business.”) The old line “buyer beware” is especially appropriate here.
Well put, Travis. Your first paragraph puts it in a nutshell. Thanks for your humorous, and often useful, insights.
Right on Travis! I am Canadian eh so I trusted him a bit too long. Don’t waste your time reading any of his crap.
So, what is the lesson for those who have followed Stansberry or Rush Limbaugh or any number of wacky politicians (can you say the name of the Mayor of Toronto without laughing?)? Clearly, unless there is a major correction in the US Market combined with a rapid rise in gold/silver, Stansberry may very well be more than a wacko: He may have lost “his” investors millions of dollars (both in real and opportunity costs). If the market was up @ 30% last year, and gold was down 25%, that is clearly a net loss of @45- 55% depending on the timing of the investments. If Stansberry was a Hedge Fund, he would have had outflows to close his operation by now. If he was a brokerage, there probably would be investigations and lawsuits. Is he a Wolf on Wall Street? Only if his trades never comes back. Apparently, Stansberry Investments is now recommending stocks and other instruments, trying to save face. The lesson learned by anyone who got caught up in this negative publication which preyed on the naive and uninformed based on political agenda is clear = do not mix politics with investing. It is a no win situation.
don’t deal with this crook……
i did follow his avise and quarupled my investment with usec in three weeks.
For e knee: That can’t possibly be true, if you’re talking about the recommendation for which Porter Stansberry was convicted of fraud. I followed that case closely through the SEC’s successful prosecution of Stansberry (he appealed his conviction and million dollar fine, and lost, all the way up to the US Supreme Court), and I had some direct e-mail exchanges about the case with Porter himself in later years (which I still retain in a computer file). Porter — well, he wrote his “fraudulent” (per the court) hype in pseudo, so he didn’t use his own name — advised buying USEC stock on 21 May and selling on 23 May 2002, and those who followed that advice certainly did not make money. If you actually made money, and even held the stock longer than 2 days, you ignored his “advice.” Porter NEVER claimed that that USEC recommendation “quadrupled…in three weeks” — which he certainly would have if that were evenly remotely true. Porter did later gloat that USEC stock had “nearly tripled in two years” after his recommendation – though, curiously, he had advised his readers in August 2002 (according to the court) that “USEC was no longer a good long-term investment.”
Stansberry hatched out from Agora Publishing and International Living (they own a big chunk of property in Nicaragua which they would love you to retire to.) I had a brief subscription encounter with the outfit enduing their endless run-on (yawn) advertorials. Reading between the lines of their editorial material revealed, to me, nothing but hype and pure pie in sky bullshit– IMHO. That was about 10 yrs ago. Don’t know if things have changed, but I quit, extremely disillusioned. Google “Agora Publishing Complaints” and see for yourselves. I have a problem with what I deem people being taken advantage of. Your mileage, of course, may vary…
Jim Briggs and Travis Johnson
Why isn’t there a way to warn unsuspecting subscribers to the dangers of investing with people or organizations that have been convicted of fraud in their investment advisory and publication businesses? I had no idea that “Porter Stansberry” had been convicted of fraud and had to pay a huge fine! I wonder what other alias’ Stansberry uses? Thank you for sharing this valuable information!!
The investment newsletter business is incredibly difficult to regulate (from what I’ve seen over the past 10-12 years), because you get into First Amendment issues and newsletters are usually (from what I’ve seen) written to emphasize that their recommendations are just that – “recommendations” – and not “personal” investment “advice.” Stansberry got into trouble because he wrote a “special report” making a direct pitch (unusual in this business) to buy USEC stock on a specific date (21 May) and sell it on a specific date (23 May), saying that one would then “make a fortune.” In a come-on sent to some 800,000 people, Porter strongly hyped his special report (quote: “Double Your Money on May 22nd on This Super Insider Tip”), which his company sold for $1,000 a copy: sales of just over 1,200 copies. (The hyped “big announcement” did not happen on 22 May, and the price of USEC stock went down that day, according to the initial court guilty verdict.) Oh, and Porter wrote his report using the name Jay McDaniel – for reasons he has never explained, as far as I know. I don’t know whether Porter has used other names – but I would kinda doubt it, given that he seems quite ready to blow his own horn and got badly burned in this case when using a pseudo. The judge in the initial court case ruled that Porter had “testified falsely at trial.” The guilty verdict was upheld on appeal, and the Supreme Court declined to review the case.
While I don’t follow this closely, the only other case of SEC action against such a newsletter that I know of was against something called Terry’s Tips – a case initiated something like 10 years ago in Vermont. I’m pretty sure the SEC won its case. You can Google it…. There may have been other court cases – I’m not sure.
Best way to track advisory newsletters in general is to subscribe to Hulbert’s Financial Digest – a very well-known and very highly regarded independent publication that closely tracks (like, minutely – strictly by the numbers) the portfolios recommended by something like 100 or more different newsletters. Only drawback in this case is that Hulbert does not track, for whatever reason (cost in a lot of cases I would suspect, or absence of an actual specific defined “portfolio” in others), most of the newsletters put out by Agora-linked firms (of which Stansberry & Associates is one) – rare exceptions being one Oxford Club portfolio and one or two others, I believe (haven’t subscribed to Hulbert personally for a couple years now).
Problem in this business is that exaggerated hype is the only way these companies know how to survive. Porter wrote once, sorta indirectly responding to an e-mail from me, that if one thought they could successfully run such a newsletter without the hype, just try it yourself.
I “dabbled” with quite a few Agora-linked newsletter services in the past (with names like Wave Strength, Contrarian Speculator, Inside Strategist, Red Zone Profits, Death Cross Trader, Velocity Trader, and others), and cancelled them all and got a full refund because once I saw their portfolio results – you had to subscribe to see them – it was clear their sales hype was wildly exaggerated, usually to just ridiculous lengths.
I will give the Agora-linked Oxford Club credit for offering, in my humble opinion, some of the best recommendations and investment philosophy in their “basic” publication, their monthly Communique. The main writer, Alexander Green, offers well-reasoned recommendations, and specific portfolios, that are not hyped at all in my view, and the membership cost is pretty low: something like $100-$150 depending on what offer you see. On the other hand, Oxford Club offers a number of high-priced services (True Value Alert, Emerging Trends, and others) that should be approached very carefully. They hype their “winners” and underplay their “losers,” though none claims to be infallible.
I don’t access Stock Gumshoe very often, but I’ve always been very impressed with the views and very useful information available here.
It must be pointed out that the “free speech” issue that Mr. Stansberry likes to cast his conflict with the “government” as, was only a rear-echelon First Amendment issue for his defense platform. If he still genuinely believes this, his counsel did a poor job of explaining the law to him because (a) the text in question was a marketing piece, i.e., “commercial speech”, which enjoys a lesser degree of constitutional protection to begin with and commands a lesser level of scrutiny. And (b) fraudulent speech, i.e., speech intended to deceive a potential buyer, enjoys no protection at all, especially not in commercial speech.
(He can count his blessings for apparently having skidded past the FTC’s attention, whose required elements for prosecution he and many other newsletter marketers may meet with stunning regularity.)
However, if the 4th Circuit Judge’s opinion was harsh, let me point out that the appellate court’s opinion was SCATHING, not only in view of Mr. Stansberry and his unsubstantiable claims, but also regarding the rational and critical facilities of his target group. (That would be you, dear Gumshoe readers and newsletter buyers!)
As recently as 2 years ago, S&A apparently was again fined, this time by the Social Security Administration, for again making false claims in the promotional literature.
Having read both the original court verdict and the appellate court decision upholding the guilty verdict against Stansberry, I don’t disagree with your analysis. But there were a whole lot of very prominent media organizations that wrote briefs (and some published articles…including the New York Times and Wall Street Journal) supporting Stansberry on First Amendment grounds: The Reporters Committee for Freedom of the Press, The American Society of News Editors, The Associated Press, The Association of American Publishers, Inc., The Radio Television Digital News Association, The Thomas Jefferson Center for the Protection of Free Expression, The Society of Professional Journalists, Investorplace Media, LLC, Alm Media, LLC, CNBC, Inc., The E.W. Scripps Company, Eagle Publishing, Inc., The Financial Publishers Association, Forbes LLC, Gannett Company, Inc., The Hearst Corporation, Landmark Media Enterprises, LLC, Lee Enterprises, Inc., The Mcclatchy Company, Media General, Inc., The New York Times Company, The Newspaper Association of America, and the Washington Post Company. Makes it tricky, it seems to me, for the SEC to go after such newsletters. Why the FTC seems never to be involved is a mystery…inflated claims are an absolute staple of the newsletter industry, but maybe without enough widespread impact to merit FTC scrutiny. Don’t know….
The irony for me personally is that to call Porter a “journalist” is an insult to the profession. He’s a huckster…as his conviction showed. He has never, to my knowledge, ever explained why he wrote his USEC promo under the pseudonym Jay McDaniel. Why did he do that if he was so proud of it? And he has never acknowledged, to my knowledge, that he wrote in a report in August 2002 (according to the original court verdict) that USEC stock was no longer a good long-term investment. And yet he crows (still) about the great “success” of his recommendation since the stock doubled or tripled in value over the next 3-4 years — long after his readers should have sold the stock if they had followed his advice. Can’t have it both ways – except to Porter, who continues to distort the facts of the case.
Everything is What you want it To Be
I have subscribed to many S&A letters over the years, and canceled most of them in the trial period. I keep a subscription to their Daily Wealth Premium ($5 per month), and to Retirement Millionaer ($80 or so a year). The latter because it’s quite interesting and non-standard.
I’ve tried others, and while some have made me money, many haven’t.
It’s all in your investing style, and in your level of speculation and time outlook. Porter takes the long Libertarian view, and because of his beliefes about the economy, is willing to ride the wild swings in gold and such, because of the likely end result. I believe the same, but never invest off of that believe (and, therefore, never follow his long term advice)–I don’t have a portfolio that I can invest for years and let it swing for possible (even likely) huge gains at some indefinable future time.
Some of the other guys over there, however–Jeff Clark, for example–have made me money. They take a much shorter term approach, and I’ve been able to follow a few of their ideas to good gains from time to time.
But, I’ve since moved to very short term trading indeed, so most of their stuff is now off my timescale.
Still, I wouldn’t call S&A, or porter himself, a fraud. I don’t personally like him (even though I agree with many of his political positions), but I think he is in it to make money selling his product. How many of us in the product selling business have cut corners, bent statements to our ends, etc., every once in a while? I can see through most of their teasers most of the time, and when I can’t, I come here to see what the real deal is from Travis. But I wouldn’t call Porter’s current stuff fraud, just often very annoying.
Well, it’s not a question of anyone calling Porter a “fraud.” It’s a simple fact that Porter was convicted of “fraud” by a US federal court of law and fined (he and his company) something like $1.5 million – a decision he appealed up to the Supreme Court, and lost. Porter says he spent something like $3 million in legal costs. (As Investor noted, the Appeals Court opinion was particularly scathing.) Incredibly, Porter used the recommendation for which he was convicted of fraud, shortly thereafter, as part of his hype for a new service selling puts, claiming his USEC stock recommendation would have made people money if held for several years, though that would have gone directly AGAINST his actual earlier sell recommendations on the stock.
Jim Briggs I agree that the Oxford Communique is good value. The proof is the success they have had with their portfolio. Most of their recommendations have done extremely well, and they are a buy and Hold group. The price I saw was @ 60 to 100 dollars a year. Good Value.
The number of amicus briefs didn’t surprise me. Not to cast aspersions on the issuing attorneys, but one can obtain those for between US$ 500-2000 apiece from the respective interest groups. In addition these groups deal mostly in genuine First Amendment & media law issues and are unaware of just how fluid the demarkations between commercial and editorial speech are in the direct-marketed newsletter industry
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As with anything in this world, you have to be careful. You cannot trust anyone. Not the government, not big business, nobody, because they are all thieves and liars. You pays your money and you takes your chances. I’ve learned that lesson the hard way. You read the opinions and you make your own decisions. After all, no one can predict the future. I had the experience of following one advisor for 25 years, and I made quite a bit of money, but in 2008, his whole operation crashed and burned and 2/3 of my retirement went with it. That was my wakeup call that no one (NO ONE) is always right. As it is, I do some of my own research into general matters, history and economics, and look for advice which goes along with that. I’ve made money on a number of the Stansberry recommendations, about the same percentage as I’ve made with the recommendations of his competitors, but I am very picky about where I put my money, as I should be. The ultimate responsibility about my investments is mine.
No I don’t think so because the man is in affinity with Mr. Ron Paul and the Paul’s are honest hard people working for the betterment of United States America of America. The fact is that he rubbed some feathers in wall street most certainly the banking system is always working against the interest the citizens of this nation and Mr. Stansberry is defending the first amendment the right to a free press should never be abridged. However, we know that bankers hate the press and illegal practices known and unknown are always overlooked by the SEC. Nonetheless, when that old banker gets in the phone with the old senator things magically start to unfold in a very interesting manner because old banker is a huge political contributor. Then good old Joe Blow gets a negative reputation and the two old geeks are laughing out loud. End Fin and “Finito” People, by the way is a disparity!
I was suckered in for the Stansberry Lifetime Membership. Fortunately for me they made changes to their access and call in service that prevented me from accessing the subscription. My biggest loss was their fee for the subscription.
They are fear mongers more than financial advisors. Beware for their shifting publishing names and apparent various publishing office locations.
It has been interesting to watch their ad (subscription) fees go from $19 to $99, $1000, $10,000.
If you read their publications, be sure to do your own research.
$tock Gumshoe is one of the best and most interesting reads.
I just received an email from Stansberry Research stating that they were about to charge my AMEX card $24 for my True Wealth subscription renewal. When I wrote back to tell them that I had already paid for a “lifetime” subscription and why are they charging me twice, they responded with:
“Charge you twice for what?
You have a true wealth subscription which is lifetime, you pay a $24 maintenance fee on that subscription each year to keep the service. any other charge is not related to the lifetime subscription you have. ”
I wrote back:
““Maintenance fee???” Who are you kidding? You give the impression that it’s a lifetime subscription and then charge a bullshit “maintenance fee?”
Maintenance for what? I’d really like to know.
You people are crooks. Please cancel my subscription to ALL of Stansberry’s products effective immediately.
If you don’t, I will complain to the FTC, the BBB and anywhere else online that will listen.
You guys suck. F##k you all.”
Well, they cancelled my subscription, but not before throwing me attitude. Stay away from Stansberry!