If you want a good conservative investment, listen to me and put your money into a nice index fund. If you want a bad conservative investment -- something that will very quickly send your hard-earned income straight to Money Heaven -- listen to conservatives. Specifically the conservatives who run media outlets with a sketchy sideline business of grifting you with goofy nonsense in sponsored emails. This is a very old story, but the fun new thing in right-wing grift is that now it's all about weed. Per Media Matters' Eric Hananoki:
Numerous conservative media outlets are scamming their followers with paid promotions for dubious marijuana stocks. In one instance, a promoted stock had its trading temporarily halted and was part of an FBI-investigated pump-and-dump scheme. In another, fine print acknowledged the promoters had "a direct conflict of interest" that would "negatively" affect "your shares."
Erick Erickson's RedState, Dick Morris, Newsmax, Townhall, and Human Events have all recently pushed the shady investments.
The SEC issued warnings about these sorts of marijuana-related penny stocks proliferating after legal weed became a reality in places like Colorado, Washington, Oregon and the District of Columbia. As Politico's Patrick Temple-West reported last week, "Wall Street cops are scrambling to weed out fraudsters preying on the fledgling world of corporate marijuana as voters legalize the drug in more states and cities." First of all, I see what you did there in your lede, nice work. Secondly, the penny-stock scams were specifically cited as a looming problem for gullible investors:
Most of the focus is on pump-and-dump schemes, which involve attempts to inflate a company’s share price and then sell, or dump, the stock before unsuspecting investors get wise to the scheme.
These scams work best with “penny” stocks traded over the counter, where even a small change in price can yield big returns. Earlier this year, the SEC temporarily halted trading for five of these stocks that had ties to the marijuana industry.
Pump-and-dump scams may involve company executives or board members looking to unload their shares. In a different variation, a penny-stock company is targeted by outside traders who will publish false information about a company to juice the share price.
And one of the ways that false information proliferates is through sponsored emails sent to devotees of conservative media outlets. For example, as Hananoki reports, readers of RedState, Newsmax or Human Events may have been lucky enough to receive this advertisement from "Undervalued Quarterly," which bills itself as the "#1 Financial Newsletter." The ad touts "MediJane Holdings" as an investment "that's poised to ignite a frenzy of profits." Readers are promised the possibility of a staggeringly high return on their investment and urged, "You must get in the game now!"
Only those who stick around for the fine print discover that the whole purpose of this mailer is to "enhance public awareness for MediJane" on behalf of shareholders who "hold a large amount of shares ... and intend to sell them," which will go on to "affect the value of your shares (negatively)." The truth of what this enterprise is actually all about is literally placed at the bottom, in teensy letters, and stuffed within parentheses.
Per Media Matters, you won't believe what happened next:
Readers who took the financial advice would have made a bad call as the stocks have plummeted. For example, conservatives sent sponsored emails recommending a company called MediJane at an entry point of $0.85. The stock's closing price on December 2 was $0.03. Dick Morris sent a sponsored email promoting Cannabis-Rx, Inc. on April 14, when it was trading at around $1. The stock's closing price on December 2 was $0.17.
And yes, of course Dick Morris is mixed up in all of this. I warned you back in August that Morris was deep into this penny-stock scam scheme. Did you listen? I hope you listened. I really care about you.
At any rate, I guess the joke here is some variation on "you'd have to be high to invest in these stocks," except that people who are actually high are probably too busy living their best lives -- procuring cheese sticks and arguing about how long the new Flying Lotus record has been playing -- to read scammy sponsored emails. Meanwhile, if you're looking for an explanation as to how a conservative movement somehow retains the affection of people they are outright bilking, well ... I'm afraid I just don't have an answer for you. Can't con an honest John, I guess.
READ THE WHOLE THING:
Conservative Media Scam Followers With Dubious Marijuana Stocks [Media Matters]
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