Hey guys,
Just wanted to give you a heads up about a guest post I did for IHeartWallStreet about the scams coming out of Florida regarding the upcoming Facebook IPO. I wrote it geared toward financial advisers and retail clients, so it's not my usual "inside baseball" Wall Street type post. But if you're curious about how I'd go about ripping off elderly retired folks by leveraging the Facebook IPO hype, check it out:
Enjoy.
What happens after the old guy coughs up the 10K?
You spend it on blow and hookers. Sorry, thought that was implied.
They don't. It's all about fronting and loading. Fronters open the accounts with some BS story about a stock that's going to the moon. Once the account is open and funded, the loader comes in and hits the client for the big money. In the Facebook case, the fronter gets the client to send in $10,000 for Facebook shares that don't exist, and then either the fronter baits-and-switches the client into something else when he can't deliver Facebook, or the loader comes in and convinces the client to send in $250,000 for some bullshit deal "that has even greater potential than a measly 58%".
There is no client retention - it's all about soaking a guy for every penny you can and then moving on to the next guy. Telling a mark that you're only going to your "best clients" with an opportunity (thereby implying that he's one of your best clients to make him feel special) is one of the oldest tricks in the book. The guy doesn't even have to be a client, he could be a prospect you've been trying to close for awhile. Then the pitch goes something like, "I've never done this before because it's only supposed to go to our top clients, but I have a feeling that you and I are going to do some huge business over the next 10 years so I'm going to make an exception in your case."
9 out of 10 people are going to tell you to get fucked, but you can make six figures a year on the one who doesn't.
Sounds like you have a little experience with the Maggot Mile!
Jesus, that's disgusting shit. Thanks for the post Eddie
bookmarked will read it tomorrow
great read
Interesting post. Maybe an obvious question. Once the old guy finds out he's been had and reports the fraud, does the entire shop just pack up and disappear? It's surprising that guys like that can be in the business for 10+ years. I imagined there would be more stringent laws to prevent repeat offenders.
Unfortunately these shops are really good at bullying clients and figuring out which ones might go to the regulators and which ones will just quietly take their lumps. Also, the SEC and other regulators (FINRA is better but has its own set of problems) are way overstretched and this is considered small time to them. When you miss a case like Bernie Madoff, there's no way you're gonna catch some scumbag in Boca Raton making $90,000 a year by scamming less than $500,000.
Thanks for the explanation.
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