Bugatti-Driving 26-Year-Old Tied to Penny-Stock Website

[ukvalueinvestment]

Let me put it another way.  I recently graduated from business school.  I didn't look for a second at the employment stats.  I knew that if I worked hard and did good things and spoke to the right people, and wrote a good thesis, I would get the right job.

 

I diligenced the university by speaking to employers and alumni.  They confirmed it was a well respected school.

 

I don't think I even read any of the university literature.  Why would I?  They are clearly biased.  If you can't see that, maybe you should reconsider attending university.

 

My Grandmother doesn't represent herself as financially sophisticated, in fact she actively says she needs advice.  So I think she deserves protection against someone phoning her up, lying and saying they are regulated, and then selling her something based on completely made up facts.

 

 

[DTEJD1997]

DTEJD1997: I'm aware of all the issues with the US educational system and I'm a 35 year old Brit - I read stuff.  I'm sorry but if you go to a lower quality university on the basis of a statistic that THEY provided, you've made a mistake.  Yes, it's manipulative and wrong, but by going to university you are implicitly telling the world you are an intelligent adult that is able to think a little.  We live in a world where we are constantly bombarded with advertising and news that is skewed, biased, manipulative etc.  We all have built up protections against that.  And then you go to university based on a statistic, and then feel conned when actually 30% of people get proper jobs rather than a stated 40% (for example)?  Sympathy is lacking here.

 

NO, the schools are advertising employment rates of 90%+, not 40%.  They are advertising starting salaries of $70k+, actual rates are MAYBE 60% of that.  They are hiring their own graduates to game the "US News & World Report" stats & placement rates.

 

So just how much due diligence is a student supposed to do?  Obviously read what the school is reporting CHECK.  Read USNWR standings?  CHECK,  talk with teachers & placement counselors?  CHECK  Read other industry publications?  CHECK

 

The problem almost all of the other sources of employment & salary statistics are based off of the statistics that THE SCHOOLS PROVIDE.  So you have a problem that bad figures get repeated on & on & on.

 

Talk to a practicing attorney?  The problem with this is "survivorship bias", by definition, employed attorneys have jobs and are making money.

 

So what does that leave?  Now there are TONS of disgruntled students, lawsuits & scam blogs.  So if you are 21 year old, you are going to give credence to some dude spouting off on the interwebs?  OR are you going to give credence to US News & World report? 

 

Who are you going to believe?  The glossy brochures produced by the school? 

 

Your guidance counselor?  Your teachers?  Your family?

 

Or some dude like me raising hell on the interwebs?

 

Schools are HIRING THEIR OWN GRADUATES GAMING STATISTICS!

 

In the USA, student loan debt is NOT dischargeable in bankruptcy....So what remedy do you have if you are duped or get a defective education? 

 

I have no idea what the situation is in the UK, but here in the USA, the education is broken...

 

 

[oddballstocks]

Let me put it another way.  I recently graduated from business school.  I didn't look for a second at the employment stats.  I knew that if I worked hard and did good things and spoke to the right people, and wrote a good thesis, I would get the right job.

 

...

 

You hit on the key to life, you networked.  If you're reasonably intelligent and can hold a conversation networking will open doors to literally anything.

[ukvalueinvestment]

But everything you've described, I know about from reading the newspaper (might have been the Economist).  So these issues aren't exactly secret.  We've known the for profits sector is dodgy for years.

 

So if I can sit on my couch in London and know about all these issues, you should know about them if you're actually applying to the university. 

[oddballstocks]

DTEJD1997: I'm aware of all the issues with the US educational system and I'm a 35 year old Brit - I read stuff.  I'm sorry but if you go to a lower quality university on the basis of a statistic that THEY provided, you've made a mistake.  Yes, it's manipulative and wrong, but by going to university you are implicitly telling the world you are an intelligent adult that is able to think a little.  We live in a world where we are constantly bombarded with advertising and news that is skewed, biased, manipulative etc.  We all have built up protections against that.  And then you go to university based on a statistic, and then feel conned when actually 30% of people get proper jobs rather than a stated 40% (for example)?  Sympathy is lacking here.

 

NO, the schools are advertising employment rates of 90%+, not 40%.  They are advertising starting salaries of $70k+, actual rates are MAYBE 60% of that.  They are hiring their own graduates to game the "US News & World Report" stats & placement rates.

 

So just how much due diligence is a student supposed to do?  Obviously read what the school is reporting CHECK.  Read USNWR standings?  CHECK,  talk with teachers & placement counselors?  CHECK  Read other industry publications?  CHECK

 

The problem almost all of the other sources of employment & salary statistics are based off of the statistics that THE SCHOOLS PROVIDE.  So you have a problem that bad figures get repeated on & on & on.

 

Talk to a practicing attorney?  The problem with this is "survivorship bias", by definition, employed attorneys have jobs and are making money.

 

So what does that leave?  Now there are TONS of disgruntled students, lawsuits & scam blogs.  So if you are 21 year old, you are going to give credence to some dude spouting off on the interwebs?  OR are you going to give credence to US News & World report? 

 

Who are you going to believe?  The glossy brochures produced by the school? 

 

Your guidance counselor?  Your teachers?  Your family?

 

Or some dude like me raising hell on the interwebs?

 

Schools are HIRING THEIR OWN GRADUATES GAMING STATISTICS!

 

In the USA, student loan debt is NOT dischargeable in bankruptcy....So what remedy do you have if you are duped or get a defective education? 

 

I have no idea what the situation is in the UK, but here in the USA, the education is broken...

 

I can confirm the survivorship bias.  I asked an attorney friend of mine about this a few months back.  He said that it seemed to him like there were a lot of lawyers, but everyone he knew from law school was working.  He graduated in the mid-90s.  I asked about new graduates and he said his firm had hired a few attorneys out of school, he didn't think it was a big problem.  He said he could remember one student who passed the bar and went to work for the family business selling RV's.  But that was it.

 

Now the interesting thing is he'd never recommend that anyone ever become an attorney.  Not for the lack of opportunities, but because the work isn't as great as people think it is.  Long hours, always trying to be billable, the stress, pressure etc.

[ukvalueinvestment]

That is familiarity bias :)

 

Truth is, very few jobs these days don't have some sort of stress.....

[yadayada]

DTEJD1997: I'm aware of all the issues with the US educational system and I'm a 35 year old Brit - I read stuff.  I'm sorry but if you go to a lower quality university on the basis of a statistic that THEY provided, you've made a mistake.  Yes, it's manipulative and wrong, but by going to university you are implicitly telling the world you are an intelligent adult that is able to think a little.  We live in a world where we are constantly bombarded with advertising and news that is skewed, biased, manipulative etc.  We all have built up protections against that.  And then you go to university based on a statistic, and then feel conned when actually 30% of people get proper jobs rather than a stated 40% (for example)?  Sympathy is lacking here.

 

rkbabang: This is a different sector of society.  Undoubtedly some bucket shops target the old and desperate.

 

yadayada: I don't really understand what your point is.

I meant, to see if you will get rich by that random email you get, you need to fact check like half an hour. And to see if your doctor is really a doctor you would pretty much have to go through med school. So that is why he needs his license. Big difference. Also a big difference between random people following some newsletter and these guys targetting some demented old lady.

 

I guess the thing that annoys me more is that we are moving too much away from our traditional world where we survived for a long time. Back in the day you used to be responsible for yourself to not get fked over, and if you did you were just a dumbass. But we are moving towards a world where you are less and less expected to take responsibility for your actions. This is all because of politics, helping out some duped group by making stupid laws (like the zero tolerance one in schools) gets you some easy votes.

 

Zero tolerance policy is the perfect example where this is taken way too far. If you get bullied in school, you now cant do anything or else you get the same punishment. What kind of bs is that? You dont need laws and policies for everything, arrest these guys if they target old ladies, and if they send around letters to random people, just let them be.

 

I supose back in the day there was common sense, and sometimes it feels like we are slowly losing that.

[rkbabang]

There was nothing in that article that described an innocent victim of this guy.  If the article is correct his "victims" deserved everything they got and more.  What he did isn't even close to as bad (not even in the same ballpark) as the whole life companies or annuities companies who do cold-call grandma and get her to turn over her entire life savings.  And that is somehow legal.  Involving dumb people who search for "penny stocks" on google in a pump and dump because they searched you out and are willing to invest in anything you tell them to, doesn't seem all that bad to me.

 

the previous articles didn't even say how he got the money. just that he left canada and had a bugatti. do you honestly think he advertised only on "penny stocks" searches? if i was running a pump and dump i would also advertise on searches smart(high income) people use. it was just an industry comment that advertising on "penny stocks" searches got super expensive because of this guy.

 

it's like saying madoff is innocent because people didn't do their research. his investors were greedy too, but it wasn't probably the wrong greedy like in penny stocks. or that he's innocent because banks or someone else has done something similar. it's still wrong and should be punishable.

 

 

He was just having people sign up for an email list and suggesting stocks to them.  Maybe he had some "high income" subscribers, but not many "smart" people sign up for a pennystock email newsletter and buy anything it suggests.  They were buying the stocks on their own with their own brokers.  Madoff was running a fund, taking people's money, and lying about his investors money for years.  He was sending people fraudulent statements.  These people thought they owned something they didn't own.  They thought he was earning them money all the while he was stealing it. There is a very big difference.  If I email a bunch of people and tell them I think stock X is going to go up and it does, then I sell.  Why is that a crime?  I was correct that the stock was going to go up.  However if I tell a bunch of people to give me money and I'll invest it for them, I then spend the money and send them a fraudulent statement implying that I invested it and it is earning a return, that is much worse.

 

No comparison.  This Buggatti driving 26 year old wasn't having anyone send him money.  He didn't manage anyone's money.  He wasn't selling investments.  He ran an email newsletter giving advice.  Should everyone involved with the Motley Fool be thrown in jail?

 

[LowIQinvestor]

"While promoting stocks is legal -- Wall Street’s biggest banks send reports daily advising investors on what to buy, often in companies that are clients -- U.S. securities law prohibits market manipulation."

 

No follow up commentary.

 

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