Stock promoter was fined by SEC
Very interesting article ... misleading disclaimer is the name of the game. I will inform SEC about "our" Austrian touts.
Cheers
Arturo
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SEC fines Florida's Weiss $2.09-million (U.S.)
2006-06-23 19:07 ET - Street Wire
by Mike Caswell
The U.S. Securities and Exchange Commission has entered a $2.09-million (U.S.) settlement with Dr. Martin Weiss, a well-known Florida newsletter publisher whose company apparently gave improper trading instructions directly to subscribers' brokers. Although Dr. Weiss is based in Florida, his newsletter has recommended several Vancouver juniors, including Scorpio Mining Corp., Metallica Resources Inc. and newsletter favourite, Great Panther Resources Ltd., according to his website.
The SEC says Dr. Weiss failed to register as an investment adviser when his company set up an auto-trading program for newsletter subscribers. Apparently the plan was somewhat of a stock tout's dream, with all recommendations automatically executed. The SEC says a subscriber could set up an account with a broker friendly to Dr. Weiss, and Dr. Weiss's company, for a fee, would tell the broker to trade exclusively on his stock picks.
By December, 2003, about two years into the program, Dr. Weiss's company, Weiss Research, was apparently directing a considerable $30-million in assets with the plan. (All figures are in U.S. dollars.)
But while Weiss Research wooed investors touting past returns of up to 400 per cent, the SEC says the recommendations were generally not profitable. It seems internal records showed an investor would actually lose money by following the recommendations.
"Although Weiss Research disclosed to subscribers that losses are possible, it did not include information on specific losing trades or disclose that, for the most part, its premium services newsletters had not been profitable for subscribers," the SEC says.
Meanwhile Weiss Research charged subscribers between $1,000 and $5,000 per year, telling investors they could recoup the fee in little time. "[From] the penny gold shares I'm eyeing right now, it's not an understatement when I say you could make back the cost of the subscription fee 30...40...even 50 times over," Dr. Weiss apparently wrote.
Without admitting any wrongdoing, Dr. Weiss and his company agreed to the fine and a cease-and-desist order in a settlement entered Thursday at the SEC. An editor for Dr. Weiss's newsletters, Lawrence Edelson, agreed to a $75,000 fine.
Weiss Research
The settlement is surely an embarrassment for Dr. Weiss, who is the author of The Ultimate Safe Money Guide, a popular book on conservative investment strategies. Forbes Magazine once dubbed Dr. Weiss "Mr. Independence."
Dr. Weiss's father first went to work on Wall Street in 1926 and was offering analysis on the economy and markets into the 1970s.
On his website Dr. Weiss calls himself "Your best source for the unbiased market commentary you won't get from Wall Street." The site offers a number of helpful tips about everything from selecting a broker to a glossary of gold stock terms.
Weiss Research publishes 11 different newsletters, with three having significant Canadian content. Gold Trader Online, Larry's Gold Trader and Red-Hot Canadian Small-Caps focus almost exclusively on Canadian mining stocks, while another, Energy Options Alert, includes a number of Canadian oil stocks.
Dr. Weiss was not available to comment on the SEC settlement.
