Transaction ID: 896***AE7 — Pay $1 and Legally “Secure” 110% Gains?

By Travis Johnson, Stock Gumshoe, September 1, 2009

This is a teaser from Mike Williams for his True Income service, so there are a few of you out there who already know what I’m about to share — but it’s an ad that’s catching a lot of attention, so I thought I should give it a look.

The ad teases that there’s a “Transaction ID” of 896***AE7 that you can use to make the transaction that Mike Williams is recommending right now. Nothing like a nice, secretive sounding number, right? And if we add on the fact that he redacts part of the name and the transaction id number, well, the Gumshoe can hardly resist!

Here’s what we hear from Mike Williams in the beginning of the ad letter:

“Pay Your Broker $1 and Legally ‘Secure’ 110% Gains in 20 minutes

“An obscure transaction in the brokerage system allows you to “lock-in” a 100+% return BEFORE you invest….

“I don’t believe in bribery.

“But for the past 14 years – I’ve been “securing” up to 100%+ returns when I invest, before I ever put down a single penny… by paying my broker $1.

“He accepts the money… and ‘locks me in’ for a gain of tens of thousands of dollars – even if the stock doesn’t go up. ‘Thanks, Jim,’ I tell him….

“You see – after spending 35 years in the financial business as an analyst, I’ve found an incredible secret to using this transaction in just 20 minutes… from anywhere in the world… without ever being fined, arrested or exposed.

“For example, this past June, I showed a friend of mine how to prearrange a 282% gain on a semiconductor firm… enough to turn every $15,000 into $42,300.

“The unbelievable part is: not only is it legal… but the way this secret works, you’re entitled by law to receive the “secured” payout, once you make the transaction. In other words: You’re under a legal obligation to be paid.

“Yes, I know this sounds too good to be true. And I admit – Once you see how this transaction first became popular, you might decide to avoid it…

“But I can assure you: this is the main way I invest my own money. In fact, as far as I’m concerned – everyone else in the market is playing a sucker’s game…

“Think about it: typically when you invest… you have NO idea whether you’ll make money or not. Not me. I know exactly how much I’m set to receive, and the approximate date I’m set to get it… by executing a $1 transaction with my broker, before I get in.

“The point is: If you’re sick of losing money… what I’m about to reveal could put a fortune in your account this year – all for the price of exactly 1 U.S. dollar per transaction.”

Impeccable logic, no? Getting guaranteed returns sounds a lot better than the rollercoaster most of us have been riding in the stock market over the past couple years. So what’s the secret?

And is it really as edgy as they tease it to be? They do, after all, make mention of the creator of this kind of transaction — a guy who spent a couple years in jail as a result …

“In 1991, Mitch Milton was arrested… handcuffed… and led from his multi-billion-dollar Beverly Hills brokerage firm to a California state prison.

“Hailed as ‘the most powerful financier since J.P. Morgan,’ he was the creator of a new transaction on Wall Street… a way to secure triple-digit investment returns on hundreds of companies – no matter what happens in the market.”

So once again, the copywriters have changed the names to protect the … guilty, I guess. “Mitch Milton” sounds an awful lot like “Michael Milken,” and the strategy that Mike Williams is indeed espousing is buying junk bonds, which is what got Michel Milken in trouble (though not because the bonds themselves are illegal). Milken and Ivan Boesky and their ilk pioneered the junk bond market, which is now known more euphemistically as the “high yield” market by most folks — these are corporate bonds that are used to fund leveraged buyouts, or to borrow money for companies, often smaller companies, who represent more of a credit risk than the A-rated corporate behemoths.

And yes, buying junk bonds (or, to describe it more accurately, lending money to corporations who are high credit risks) is perfectl