Fox Gives Show To SEC-Fined Analyst Who Was Paid To Push Now Worthless Stocks
Blog ››› ››› ERIC HANANOKI
Financial analyst and Fox Business contributor Charles Payne, who has been fined by the Securities and Exchange Commission (SEC), been paid to promote now virtually worthless penny stocks, and smeared the poor as "indebted servants" to the government who are too "comfortable" living in poverty, is being rewarded with his own show, the network announced today.
Fox Business said the show, Making Money with Charles Payne, will debut on June 2 in the evening. FBN executive vice president Kevin Magee praised Payne as having "an incredible talent for identifying growth sectors in the markets and we're excited to launch a new show dedicated to helping viewers spot these emerging investment prospects."
That Payne has a talent for identifying growth may be a surprise to someone who followed some of Payne's previous stock advice. After joining Fox in 2007, Payne was compensated to push the prospects of three stocks, as Media Matters documented in July 2013. Payne used his Fox credentials in promotional materials to assure skeptical investors that his advice was trustworthy. The stock of those companies are now virtually worthless:
- Payne was paid $40,000 to promote The Brainy Brands Company. Payne claimed on PaynesEarlyEducationStock.com that Brainy Brands could "help you profit 233%, turning $10,000 into $33,300." The stock is now worthless.
- Payne was paid "$25,000 by a third party" to promote NXT Nutritionals Holdings. Payne claimed NXT could "turn $10,000 into $25,000." The stock is now worthless.
- Payne was paid an undisclosed amount for a "consulting arrangement" to promote Generex Biotechnology Corporate. Payne issued a report through his Fox-promoted website recommending Generex as a "long idea" for investors at $1.58. The stock now trades at less than 3 cents.
The practice of compensated stock endorsements is currently prohibited by Fox rules, and resulted in the contract termination of contributor Tobin Smith. Payne responded to inquiries from Media Matters by ducking questions and scrubbing his corporate website of information.
Payne and his company, Wall Street Strategies, have a problematic history related to the proper disclosure of stock recommendations. In 1999, the SEC announced that while not "admitting or denying" wrongdoings, Payne "agreed to pay a civil penalty of $25,000." The SEC alleged of Payne:
Charles V. Payne is a resident of New York, New York and is the President of Wall Street Strategies, Inc. The Complaint alleges that on at least eight occasions, Wall Street Strategies recommended that its clients purchase Members stock through recorded messages on its telephonic stock recommendation service. The Complaint also alleges that Payne failed to disclose that he received payments from Members to promote Members stock. Without admitting or denying the alleged violations, Payne consented to the entry of a permanent injunction against violations of Section 17(b) of the Securities Act of 1933. In addition, Payne agreed to pay a civil penalty of $25,000.
Wall Street Strategies, Inc. is based in New York City. Without admitting or denying the alleged violations, Wall Street Strategies, Inc. consented to the entry of a permanent injunction against violations of Section 17(b) of the Securities Act of 1933. In addition, the company agreed to pay a civil penalty of $10,000.
- attacked poor Americans as "indebted servants" who believe society "owes" them.
- said men who receive Social Security disability benefits are "modern-day eunuchs."
- criticized anti-poverty programs because "it gets a little comfortable to be in poverty."
- defended billionaire venture capitalist Tom Perkins after he compared the treatment of wealthy Americans to what happened in "fascist Nazi Germany."
- claimed progressivism "fuels high drug addiction, crime rates."
- lamented that there isn't enough "stigma" surrounding food stamps.
- opined that wealth disparity "really doesn't" bother him -- "in fact, it inspires me."
- explained that after Thanksgiving people "take their welfare checks and bum rush" Wal-Mart.
Payne joins a Fox Business lineup that includes a shock jock who called women's basketball players "nappy-headed hos," a host who enjoys "being mean to poor people," and John Stossel. In other words, Making Money with Charles Payne will probably fit in well with the network and its mission to be a "more business friendly" channel.