Many television viewers encounter strange, disjointed ads promoting NewAmerica3.com. The ads plead with viewers to visit the website, where the narrator promises a Nostradamus-like offering of dire prophecies for the future.
What most viewers don’t know is that the man behind the ad has been found liable in the past for defrauding investors.
Meet Frank Porter Stansberry. In 2003 the Securities and Exchange Commission filed a complaint against him for peddling false information to subscribers of his financial newsletter. The name of his company at the time was Pirate Investor.
According to the SEC, Stansberry told email subscribers that if they paid $1,000, he would provide a hot investment tip based on inside information from a “senior executive inside the company.” He encouraged customers to purchase stock, promising they would “make a fortune.”
The man who supposedly provided Stansberry with the information denied ever doing so, and many investors lost thousands of dollars by acting on the fabricated information.
The SEC complaint declared that Stansberry “engaged in an ongoing scheme to defraud public investors by disseminating false information in several Internet newsletters.”
Approximately 1,217 individuals took the bait and purchased the report with fraudulent information after reading an email solicitation signed by Stansberry’s pseudonym “Jay McDaniel.” The solicitation was sent to at least 800,000 people, and netted a total of $1,005,000.
In 2007 Stansberry was ordered to pay $1.5 million in restitution and penalties for the scam. The judge ruled that his actions “undoubtedly involved deliberate fraud” and “making statements that he knew to be false.”
In 2009 an appeal by Stansberry was denied. The Fourth Circuit Court of Appeals ruled that “it would take an act of willful blindness to ignore the fact that Appellants profited from the false statements.”
Stansberry, for his part, vehemently denied wrongdoing. Writing in his own defense, he claimed his First Amendment rights as a publisher had been violated, and insisted his predictions were mostly correct.
That case wasn’t Stansberry’s only foray into questionable marketing tactics. In 2003 he told subscribers that investing in the company behind a unproven AIDS vaccine was “the only realistic chance to make 50 times your money in the short term.”
Stansberry’s promotion of the AIDS vaccine company, VaxGen, was discounted by the company’s own spokesman, who described “the tone and manner” of Stansberry’s pitch as “very objectionable.”
Visitors to NewAmerica3.com are presented with a video ominously warning of an apocalyptic future, and encouraging them to trust Stansberry’s proven track record of accurate predictions.
The website offers potential customers an amazing discount — $49.50, rather than the usual $99 rate — for a year-long subscription to a monthly online newsletter and access to several research reports provided by Stansberry’s company, the Baltimore-based Stansberry & Associates Investment Research.
One of the products subscribers receive is a report titled “The 4 Investment Assets You Do NOT Have to Report to the U.S. Government.” A description of the report promises information “vital to getting rich in the coming currency crisis.” Other reports encourage investment in gold and silver.
The mass-media have largely overlooked the barrage of Stansberry’s television advertisements.
A public relations representative for one cable television channel told The Daily Caller that the ads may be distributed over external ad networks, rather than sold directly by channels. The ads can be blocked by individual channels, however, even if they are run by external providers.