Consumer News Probe Prompts Financial Publisher to Change Marketing

Investigation finds Stansberry used deceptive tactics in testimonials.

Consumer News Probe Prompts Financial Publisher to Change Marketing

The testimonials on the Stansberry & Associates Investment Research website were quite intriguing. The testimonials claimed that if you followed the investment tips in the company’s newsletters you could make $10,000 a month, bag a quick $20,000, or earn in excess of $300,000 in gains. Some newsletter subscribers who were quoted in the testimonials said they were sitting on a million dollars or more after following the company’s secrets to financial success. But an in-depth investigation found significant problems with the claims. All of the testimonials, almost half of which targeted the elderly or those planning for retirement, had omitted vital information, including the risks involved with investing money. Many of the testimonials did not appear to report results that are typical or achievable for the ordinary subscriber. And some contained blatant lies.


Before’s complaint letter:


After’s complaint letter: took action, alerting Porter Stansberry (the founder of the company) in a letter March 11 that it had found that his company and its website——had violated FTC regulations, state laws, and a prior SEC court order. requested the company within one week remove more than 200 deceptive testimonials from its website and promotional materials and clearly disclose on its website the risks of investing money or it would send complaints to federal and state regulators. The company complied by March 18, removing hundreds of testimonials and posting a disclosure on its website that trading stocks is risky and that past performance is no guarantee of future results. It also signaled it would incorporate the changes into future promotions and testimonials.

Though company officials maintain that the company’s advertising and testimonials were not deceptive, Porter Stansberry wrote in an emailed letter to’s legal director:

…it appears we may have made a few mistakes in the marketing materials on our websites. That’s extremely frustrating for me…We are going to fix these problems as soon as possible and take whatever actions are necessary to make sure this doesn’t happen again – including replacing staff where necessary.

Who is Stansberry?

The Baltimore-based Stansberry & Associates Investment Research is a private publishing company that sells 15 different newsletters focused primarily on giving investment and trading advice. It touts that it has nearly a million readers in 120 countries. The company has made headlines before when the SEC went after it in 2003 for fraud. As a result of the SEC’s lawsuit, the company, then called Pirate Investor, LLC, its parent company, and Porter Stansberry, were later ordered by a court to pay $1.5 million and to refrain from making any misleading or untrue statements, as well as from using any scheme to defraud the public.

Despite the company’s focus on providing investment advice, Stansberry is exempt from certain SEC regulations governing investment advisors because it is a “newsletter publisher,” rather than a firm that handles individual portfolios and provides one-on-one advice. For example, Stansberry is exempt from having to abide by the SEC’s complete ban on the use of testimonials, which the agency views as inherently misleading. While Stansberry fits within this loophole – and the company maintains the disclosures requested by are not legally required— maintains that the company is not exempt from federal and state laws governing false and misleading advertising, or from complying with the 2007 court order that prohibits the company from making misleading and untrue statements.

In investigating Stansberry, is calling attention to important information consumers should know about tactics sometimes used in the thriving newsletter industry, such as touting results not typically achievable and omitting crucial information.

“Stansberry did the right thing in acting quickly to remove the testimonials and post the disclosure about risks. It’s a good start,’’ said Bonnie Patten, executive director of “Stansberry isn’t the only company out there that has been deploying these kinds of sketchy practices. We will continue to pursue companies that we find are misleading consumers.”

Here are the findings of’s investigation:

1.     Testimonials on the site omitted vital information

  • None of the testimonials warned of the substantial risks of investing money, nor did the company clearly or prominently disclose such risks.
  • Of the 178 testimonials that referred to specific monetary gains, more than 90 percent did not provide enough information to calculate the rate of return on investment.
  • Less than 2 percent of the testimonials mentioned the month and year of when the claimed success occurred, thus depriving the consumer of knowing the market conditions at the time, and allowing the company to imply that testimonials based on old, stale advice were actually current testimonials based on current newsletter advice and current market conditions.

2.    Atypical investment results

  • Of the 16 testimonials that did provide a rate of return or some information to calculate a rate of return, all claimed to exceed the Standard & Poor’s (S&P) 500 Index average for the last ten years and the rate of return achieved by David Swensen, Yale’s chief investment officer, who grew the University’s endowment from just over $1 billion to almost $20 billion over 27 years. All but one claim to exceed Warren Buffett’s average rate of return of 19.7% from 1965 to 2012.
  • While the people quoted in the Stansberry testimonials included truck drivers, office workers, and even unemployed individuals who seemed to come from modest means, they shockingly seemed to be able to invest six–, seven–, and eight-figure amounts.Though the vast majority of testimonials did not indicate the initial investment amount, made calculations using the limited information provided (i.e., the touted gain and the amount of time it took to get there) and a hypothetical, and quite generous, rate of return of 20 percent. In doing so, found that the smallest amount any of these subscribers would have had to invest was more than $64,000. More than half would have had to invest $500,000 or more and 21 percent would have had to invest more than $1 million. Five percent would have had to invest more than $10 million.
  • One testimonial even claimed that a 10-year-old child earned $100,000 per year following Stansberry newsletter advice.

Stansberry officials said that some of these testimonials, including the one from the child, came from newspaper articles and that it was clear to readers that the investors quoted were not Stansberry subscribers. disagreed.

S&A testimonials implied unusually high ROR. used a ROR of 20% to make these calculations.


3.    Suspiciously similar results and quotes

  • A number of different individuals quoted in testimonials claimed to have earned the same exact amount of money and use similar, if not identical, wording. Three different people, for example, all made “about $15,000 to date” and found a Stansberry tip to be the most “exciting” and “profitable” strategy in 20 years; two different people earned exactly $72,389; two earnedexactly $15,460; and three “made over $13,000 in January.”

Stansberry officials said names of those quoted in testimonials were changed to protect their identities, though that wasn’t previously disclosed. The company has now disclosed that fact and admitted to that it may have duplicated some testimonials.

4.    Testimonials promoting retirement newsletter contain false or misleading information 

  • Several testimonials used to promote one of two retirement newsletters published by Stansberry – Retirement Millionaire – claimed that the newsletter gave them the secret to obtaining “free” silver from U.S. banks. However, learned that the silver was not free at all; consumers had to exchange their paper dollars for half dollars that contain silver — and those were ones only minted before 1971.

Stansberry officials said “free silver” isn’t false or misleading because it is in reference to “its value above the actual legal tender value of the half dollar.”

  • A testimonial in a Retirement Millionaire promotional video deceptively told consumers that the endorser was able to take a cruise at a fraction of the cost thanks to a Stansberry tip, but failed to mention that in order to get the discounted price, consumers had to work on the ship and have a specific skill to be hired to qualify for the discounted vacation.

Mark Arnold, Stansberry’s director of business development, when asked if the company had any additional comments about’s investigation or information for its readers said in an email:

I am proud of our organization and how we approach things. But, that does not mean that there isn’t room for improvement. If any past or current subscriber of ours is not satisfied with our products, we typically go above and beyond to make sure that person has a good experience with our company. If someone did not, I invite them to contact our customer service department by phone or email right away at [email protected] or 1-888-261-2693.  We will do our very best to make sure that they are treated well.

More information about’s investigation and Stansberry’s response can be found here.

Click here to review consumer complaints the FTC has received about Stansberry.

Tips on how to evaluate an investment newsletter before subscribing can be found here

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