Annual Fraud PSA (Part 1)

Dissecting and exposing Changewave’s “riskless collar” returns me to the path of public service announcements (e.g. here and here). I want to remind you that suspicion can never be relaxed about the financial industry notorious for bad apples.

I often do internet research because a wealth of information lies in wait to be found. I looked for reviews of Changewave Investing. Online reviews are dicey because they may or may not be sincere. Positive reviews are sometimes shills for the company (including friends, family, and marketing partners). Negative reviews may be industry competitors. The more I read, however, the more I feel I’m able to separate wheat from the chaff. The overall gist may offer some meaningful nuggets and red flags. To some extent, I go with my gut.

I found “Tobin Smith” linked to ChangeWave, which led me to this worthwhile article. Roughly halfway through I found:

     > Likewise, in March, the SEC settled a fraud case with Tobin Smith
     > of the NBT Group, a publication service also known as “Next Big
     > Thing Investor” and formerly named ChangeWave. The SEC
     > alleged that he failed to fully disclose how much he was being paid
     > to promote the stock of IceWEB, a fledgling data-storage company.
     > The problem here, for the SEC, was that he didn’t disclose he got
     > additional incentive pay if the stock went up. Smith and NBT neither
     > admitted nor denied the allegations in the settlement, but he has
     > to cough up profits and pay a fine [emphasis mine].

Anyone in the financial domain who has ever been linked to fraudulent activity should be avoided. This is an exception to my general belief that people deserve second chances. Too many times I have seen hucksters get “slaps on the wrist” for their misdeeds, which leaves the door wide open to recidivism. Take no chances with your hard-earned money; avoid those with a history of deceit.

After questioning Changewave before, I was now even more convinced about their illegitimacy.

As an aside, this article reminds us to be very leery of “hot” stock tips found online:

     > The problem is, all of this was a lie to dupe investors, the SEC alleges
     > in a complaint filed against Peterson in March. Peterson made the
     > bogus claims in the company filings, and backed them up with posts
     > on an InvestorsHub.com chat board during 2012-2013, says the SEC.
     >
     > Using the pseudonym “dick_schmidt,” Peterson posted over a hundred
     > times to the RV Plus board, calling the company “undervalued” and
     > urging investors to “buy up as much as possible…” When other
     > posters question his company’s financials, he responded: “Fed filings
     > don’t lie.” He also posted that if the contracts were bogus, someone
     > “would have detained the CEO or whoever was responsible for faking
     > something this extreme. Let’s use our common sense here…”
     >
     > …Don’t trust message boards unless you know who is really posting.

Great advice!

I will continue next time.