In what may be a fundamental challenge to his business model, controversial financial tipster Porter Stansberry has been accused by an independent consumer watchdog of publishing hundreds of improper testimonials, including what are described as "blatant lies", in breach of federal regulations.
The allegations come from truthinadvertising.org, a Connecticut not-for-profit organization that claims a mission to be "the go-to online resource dedicated to empowering consumers to protect themselves and one another against false advertising and deceptive marketing."
Truth in Advertising (TINA) conducted what it describes as an in-depth investigation: reviewing hundreds of of purported customer testimonials and recommendations contained in numerous newsletters and other publications from Porter Stansberry's Baltimore-based company, Stansberry & Associates Investment Research.
"The testimonials claimed that if you followed the investment tips in the company's newsletters you could make $10,000 a month, bag a quick $20,000, or earn in excess of $300,000 in gains," says TINA. "Some newsletters subscribers who were quoted in the testimonials said they were sitting on a million dollars or more after following the company's secrets to financial success."
Praise for Porter
Such good-to-be-true claims are close to the bedrock of Porter Stansberry's commercial strategy, depending as it does, on a formula writing technique that, at strategic points in often lengthy texts, relies on apparent vox pops:
"I got a check for over a million in less than 2 weeks"
"I've doubled my money 10 times"
"I'm up over 335% so far"
Stansberry followers may recognize such ecstatic testimonials in everything from promotions offering to reveal the investment techniques of former president Bill Clinton ("The $84,550/Month Super-Secret") to what Porter Stansberry claims to be the most profitable idea he has ever discovered ("S&A's Greatest Wealth Secret"). Each is crammed with dozens of what appear to be customer praise.
"Consider the case of Bill and Janice H., a Pennsylvania couple. They began using the 'Dividend Boost' secret starting with just $122. Within eight years, they had collected nearly $100,000 in extra income."
But TINA's review discovered - as many have long suspected - that countless among such "authentic voices" are not quite what they appear to be. On 30 March, the 501(c)(3) organization reported a litany of issues that - as I will summarize below - was received by Porter Stansberry with shock. As he wrote in reply to a letter from Laura Smith, TINA's legal director:
"We are going to fix these problems as soon as possible and take whatever actions are necessary to make sure this doesn't happen again - including replacing staff where necessary."
Such a decisive stand, however, was not his company's first reaction. It initially tried to rebut the complaint. A lengthy email from Stansberry's lawyer, one Nicole Fisher, sought to justify the testimonials, point by point.
So what did TINA's review find? I think it will shock you. And, upon reviewing the law, you might have to wonder if Stansberry's business will ever be quite the same. Indeed, such are the changes that would be required at Stansberry & Associates that the jury may be out on whether compliance would damage his enterprise at its core.