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Summarized by Melisa Davis
LDS Investment Guru Under Investigation
SEATTLE, WASHINGTON -- Former cabbie Wade Cook created a large
financial-seminar business, sharing strategies of triple-digit annual
returns on investments. Now the Federal Trade Commission and
authorities from 13 states are nearing completion of settlement pacts
with the Wade Cook Financial Corporation because of numerous customer
complaints.
Cook, owner of LDS book publisher Aspen Books and a member of the
Church of Jesus Christ of Latter-day Saints, gave two-day seminars in
hotels about his "meter-drop" investment philosophy. From his
experience driving cabs, he learned that because customers paid $2
just to get into his taxi, short trips were more lucrative than long
ones. His strategy on investing was the same -- quick buy-and-sell
trading would bring bigger returns, and he promised investors that
they could earn more than 20 percent in a month. In a Washington
State investigation, returns on his accounts between 1995 and 1998
were actually between 3.3 percent and negative 5.3 percent.
These seminars netted Cook $118.2 million in revenues in 1998. The
proposed settlement would require that he reimburse to the tens of
thousands of participants up to $5,695 and pay $400,000 to the states
to cover investigation costs. Although the settlement restricts
Cook's promotions -- he has to show three years of returns using his
investment advice -- Cook is allowed to continue selling his
seminars, books, audio and video tapes and infomercials.
It is not know what effect, if any, the settlements will have on Aspen Books.
Source:
Self-Annointed Investment Expert Investigated
Wall Street Journal 2Sep00 B2
By Jeff D. Opdyke: Wall Street Journal
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