Yesterday, we highlighted how WorldNetDaily financial columnist Porter Stansberry bragged that he's ready to flee the country at a moment's notice with most of his wealth to a locale “that doesn't have any ties to America.” We did some looking into Stansberry's background and found a large sanction against him from the Securities & Exchange Commission.
In 2003, the SEC filed a complaint against Stansberry, his operation (then called Pirate Investor, now called Stansberry & Associates), and the company that owns Stansberry's operation, Agora Inc. The SEC argued that Stansberry's newsletters “contain nothing more than baseless speculation and outright lies,” citing an example in which Stansberry promised investors they could double their “investment dollar in a single day” on one stock tip, which he would sell for $1,000. In fact, the stock went down nearly 15 percent on the day Stansberry promised investors they would double their money.
In 2007, the SEC ordered Stansberry and his company to pay $1.5 million in restitution and civil penalties, stating that, according to an August 10, 2007, Baltimore Sun article (retrieved from Nexis), Stansberry's company “acted in reckless disregard for regulations when it published Stansberry's unbelievable claims without a shred of confirmation.” The parent company, Agora, was not held liable.
Stansberry appealed the fine and tried to press his case in public. Stansberry's lawyers, David Rivkin Jr. and Bruce Brown, penned a November 2008 Wall Street Journal op-ed arguing that the SEC has no jurisdiction in the case because it didn't involve insider trading. The issue is regulation of “disinterested stock analysis,” Rivkin and Brown wrote, and “the SEC has no more business penalizing a writer who simply covers the markets than the Food and Drug Administration has in regulating a cookbook publisher because an official questions the nutritional content in a meatloaf recipe.”
In September 2009, the Fourth U.S. Circuit Court of Appeals upheld Stansberry's SEC sanction, stating that securities fraud is not protected speech and "[p]unishing fraud, whether it be common law fraud or securities fraud, simply does not violate the First Amendment."
Stansberry has popped up on occasion in more mainstream news outlets. Barron's touted him as “highly regarded” and “remarkably prescient” in July 2008; a February 2009 Associated Press article cited Stansberry, as did a separate February 2009 USA Today article.
None of these articles mentioned Stansberry's SEC fine. Unsurprisingly, WorldNetDaily hasn't either. Quite the contrary: When his column began in December 2009, WND claimed it was “introducing readers looking for sound, reality-based investment information to the respected financial research outfit Stansberry & Associates.”
How does “sound, reality-based investment information” mesh with a $1.5 million SEC sanction for selling “unbelievable claims without a shred of confirmation” to investors? That's something WND (and Stansberry) should explain.