Most people have never heard of Porter Stansberry. In the wide open spaces of the worldwide web, an investment tipster would need to get pretty big to make a dent on the public consciousness. But of those who have, I would think that most have by now learnt something about the so-called "Stansberry scam" or "Stansberry fraud".
In case you don't know, that was a scandal in which Stansberry and two of his associated companies were prosecuted in 2003 by the Securities and Exchange Commission, and in 2007 fined $1.7 million by a Baltimore court for selling what he falsely claimed to be "insider information".
My name is Brian Deer, and I've been following Porter Stansberry, his businesses, advice and reputational controversies since before that fraud was first spotted. Way back in the day, was working on a Sunday Times magazine investigation into a San Francisco based biotech start-up that was wrongly claiming the "world's first Aids vaccine".
The SEC action that began the same year chimed eerily with my own experience. Stansberry claimed that his predictions for future stock movements were based on special sources of information that investors could tap in to by subscribing to his newsletters for what seemed like hefty fees.
As the US court of appeals for the fourth circuit ruled in 2009, a lower court's judgment that Stansberry had perpetrated fraud was based, "not on the prediction itself, but on Appellants’ [Porter Stansberry's] claims that the prediction was the result of a conversation with a company insider."
So far, so good. This information has long been available. In my own reports, I've documented from many different angles how the fraud case played out, and have been scrupulous to give Stansberry's side of it.
Porter Stansberry and social security
But what is less well known is that misfortune struck a second time. And on not too dissimilar terrain. In September 2011, Stansberry again fell afoul of a government watchdog over his claim to have obtained highly valuable information from "insiders". This time it concerned social security.
"Today's mail included a 'Time sensitive Document'," was how one writer sarcastically reported receiving a document from a Stansberry & Associates venture in June 2010. Inside, he said, were two items:
"Gosh, this sounds good," commented the unimpressed writer. "It even is printed on something that has a form number "SA TW38" with something that looks like a bar code (similar to print outs from Social Security). Looks so "official". Gosh, this must be something important from the government."
But no, he was wrong. It was from a Stansberry project, offering "secrets" in a newsletter for sale. And these secrets included - or at least this was claimed - the beguiling promise of being eligible for social security "no matter what your age".