Media outlets like CNBC, The Wall Street Journal, Fox Business, and Bloomberg Television have been giving a platform to a disgraced financial firm that was fined $1.5 million by the Securities and Exchange Commission for engaging in “deliberate fraud” and profiting from “false statements.”
The firm, Stansberry Research, heavily markets itself in conservative media by catering to right-wing audiences' fears of President Obama and big government. It predicts doomsday “End of America” financial scenarios that involve waves of violence, “martial law,” and the destruction of the American economy. Last year, for instance, Stansberry claimed on its EndofAmerica.com website that on “July 1st, 2014,” "'H.R. 2847' goes into effect. It will usher in the true collapse of the U.S. dollar, and will make millions of Americans poorer, overnight." (America and the dollar did not end.)
Numerous observers have criticized Stansberry's marketing practices as “misleading,” “dubious,” “questionable,” and “an example of the worst excesses of financial marketing.”
- Snopes.com, which debunks urban legends, called Stansberry “an investment firm trying to scare potential customers into forking over money for a newsletter subscription.”
- Fortune wrote that Stansberry is one of the “doomsayers trolling the Internet today, warning of imminent financial collapse.”
- Reporter Asawin Suebsaeng wrote in Mother Jones that the firm “has a history of promoting dubious claims.”
- The Daily Caller called Stansberry founder Porter Stansberry a “fraudster” and noted the firm engages in “questionable marketing tactics” and produces videos “ominously warning of an apocalyptic future.” (Despite their criticism, the Caller later sent a sponsored email for Stansberry.)
- Truth in Advertising, a nonprofit organization “against false advertising and deceptive marketing,” criticized a “misleading” Stansberry marketing scheme related to getting “free” silver from banks.
- Christopher A. Hopkins, an executive at an investment advisory firm, wrote in the Chattanooga Times Free Press that Stansberry's ads are “an example of the worst excesses of financial marketing intended to cynically exaggerate and exploit legitimate concerns.” He added that the ads “are so pervasive that many financial advisers find themselves entreating nervous clients to ignore them. This type of marketing abuse complicates life for the vast majority of advisers who conscientiously focus on their clients' best interest.”
The firm also paid a $55,000 civil monetary penalty to the Social Security Administration in 2011, while not admitting wrongdoing, to settle an allegation it broke federal law.
Despite this dubious background, financial media have regularly turned to Stansberry Research staffers as experts in recent months:
- Fox Business' Countdown to the Closing Bell hosted Stansberry Research chief strategist Steve Sjuggerud on March 10.
- Fox Business' Countdown to the Closing Bell hosted Sjuggerud on February 12.
- Fox Business' Countdown to the Closing Bell hosted Sjuggerud on January 16.
- CNBC's Worldwide Exchange hosted Sjuggerud on January 12.
- CNBC's Worldwide Exchange hosted Sjuggerud on December 22.
- Bloomberg Television's Market Makers hosted Sjuggerud on December 9.
- The Wall Street Journal quoted “Kim Iskyan, who focuses on out-of-favor markets at independent research firm Stansberry & Associates Investment Research,” for a November 4 article about Macau stocks.
- CNBC's Worldwide Exchange hosted Sjuggerud on November 3.
During appearances in prominent financial outlets, Stansberry staffers generally stick to financial analysis and avoid paranoid rhetoric. But these outlets are still effectively promoting a group that disregards the best interests of investors with dubious theories and financial advice.