The courts disagreed. In 2009, after years of very public litigation, a federal appeals panel upheld the SEC’s charges and fined Stansberry $1.5 million.
Stansberry — who had enjoyed some respect in financial circles and whose First Amendment argument (though not his conduct) was endorsed by respected news outlets who feared the case would set a precedent for punishing the press for publishing incorrect financial analysis — did not take the verdict well.
He did not stop peddling advice — but these days, it’s about more than get-rich-quick schemes. Evidently soured on the government by his brush with the law, Stansberry has turned from scam artist to antigovernment radical, using various Internet publications to mix dubious investment advice with apocalyptic warnings about a coming era of tyranny that will destroy America.
His most recent insight? According to a YouTube video distributed across a multitude of far-right websites and discussed with great seriousness by figures like antigovernment conspiracist Alex Jones, President Obama is planning to overthrown the Constitution, implement socialism, and seize a third term in office.
According to Stansberry, Obama won’t even have to use force to do it. Instead, the president plans to buy his third term with untold profits gained from mining America’s vast shale oil deposits, which will lead to an era of extraordinary prosperity unlike anything America has seen before.
“All of this new wealth,” Stansberry says, “will seem like a gift from the Prophet Muhammad to the administration of Barack Obama.”
And his supporters will eat it up. Once the black gold really starts flowing, Stansberry claims, the president will execute a Hugo Chavez-like power grab, distributing money and favors to friends, cronies, and political allies, who in return will cheer for him in the streets as he seizes an unconstitutional third term — and, possibly, even a fourth — in office. During his reign of terror, Obama will replace America’s market economy with a socialist dictatorship and “punish and tax those who work hard,” using the wealth they create to “buy favors and luxuries for millions of Americans … who have done nothing to earn it.”
America, of course, will be ruined.
Stansberry is not the only ultra-libertarian to promote such ideas. One of his most prominent fellow travelers is Doug Casey, an antigovernment “investment guru” who on Nov. 29 told subscribers to his newsletter that being a taxpayer in America today is analogous to “being a Jew in Germany in the mid-1930’s.”
On the surface, Casey (who often cross-promotes Stansberry’s articles on his various websites and newsletters and who is described by Stansberry as a friend and mentor) seems a cheerful misanthrope, whose breezy manner and self-deprecating wit (he often says Uncle Scrooge McDuck is his hero) is a refreshing change from the pompous grandiosity of his close cousins in the far-right “Patriot” movement.
Mitt’s Multilevel Minions
Mormon country is rife with miracle-pure peddlers whose get-rich-quick schemes have boomed in the recession. One of the biggest beneficiaries of their campaign largesse? Mitt Romney.
By Stephanie Mencimer
Mother Jones | May/June 2012 Issue
Inside a cramped doctor’s office near a busy thoroughfare in Alexandria, Virginia, two women are getting their faces buzzed with a faintly humming device that looks like an electric razor. It’s a “galvanic spa,” and its electrical charges, combined with special gels and serums, are supposed to target “youth gene clusters” and reverse the effects of aging. But the group of about 20 men and women gathered here haven’t come just for the free skin-care treatments. They’re here to learn about a business opportunity.
This is a recruiting session for the Utah-based multilevel-marketing (MLM) company Nu Skin, which sells vitamins, dietary supplements, and beauty products through a network of independent distributors. The meeting is led by an energetic 42-year-old named Martha Sanchez, who frames her pitch with a lengthy explanation of just how hard it is to save for retirement. She flashes slides that illustrate how much of a nest egg you need to generate $5,000 a month in “residual” income: At 5 percent interest, it’s a staggering $1.25 million.
The promise of a steady flow of passive income lies at the heart of Nu Skin’s pitch. Its business model entails recruiting distributors, who in turn recruit more distributors, and so on, with each layer kicking the proceeds up the chain. Theoretically, as your “downline” grows, so do your monthly commission checks, even as your own effort diminishes.