Article: Bankruptcy Judge Orders Wade Cook Into Liquidation

Discussion in 'Educational Resources' started by gwb-trading, Jan 27, 2003.

  1. gwb-trading


    Bankruptcy Judge Orders Wade Cook Into Liquidation

    January 22, 2003

    SEATTLE -- Wade Cook Financial Corp. was ordered liquidated by U.S. Bankruptcy Judge Thomas Glover after the money-losing stock-market seminar company's chief executive failed to provide testimony requested by creditors.

    The creditors of Seattle-based Wade Cook Financial asked the court Dec. 19 to force the company and its subsidiary, Stock Market Institute of Learning Inc., into bankruptcy, alleging employees hadn't been paid back wages and that their health insurance was canceled after the company collected and pocketed premiums.

    Wade Cook Financial's "failure to respond to the discovery requests have prejudiced and irreparably harmed" the creditors "by denying them the ability to adequately prepare for trial," wrote Glover in ordering the Chapter 7 bankruptcy.

    In Chapter 7, the bankrupt company is liquidated by a trustee. The trustee supplants the existing management and is legally obligated to serve the best interests of creditors.

    Chief executive and founder Wade Cook said he will ask the judge to convert the case to a Chapter 11 reorganization. "Nobody is saying we haven't been struggling financially," said Cook, who at one time advertised heavily and frequently held seminars in Utah.

    Cook predicted a year ago that the company would earn $6 million in 2002. The company lost $6.2 million in the first nine months of the year, according to a filing with the U.S. Securities and Exchange Commission.

    The company had $16,000 in the bank on Sept. 30, according to an SEC filing. The filing showed liabilities of $11.5 million and assets of $5.7 million, leaving a working capital deficit of $5.8 million.

    Michelle Carmody, an attorney for the creditors, said the company failed to provide any financial records requested under bankruptcy law. "We had a deposition scheduled for Wade Cook on Tuesday. He didn't appear," Carmody said.

    The market value of Wade Cook Financial's outstanding shares is $720,000. The stock gained 9 cents to close Tuesday at 20 cents in over-the-counter trading.

    In October 2000, the company, which charges $6,295 for its 16 hour "Wall Street Workshop," settled Federal Trade Commission charges that it misrepresented its stock trading success to attract customers. The company disclosed that it lost 89 percent of its stock portfolio's value in 2000 and 60 percent in 2001.

    In a filing with the bankruptcy court on Jan. 15, the FTC estimated the company still owes $1.5 million to its former customers as part of the settlement.
  2. i guess selling covered calls isnt the holy
  3. Is Cook being force liquidated because he is such a good trader?
  5. You'd better sell your Wade Cook books, quick!:D
  6. CalTrader

    CalTrader Guest

    A genius ? Hardly. If your path in life is to gain at the expense of others then you are not a genius: just an opportunist. If I made millions via the revelations described in the court documents then the right thing to do would be to give back your profits to the shareholders, employees, and customers.
  7. nkhoi


  8. I actually work with a guy who dropped 6 grand for his seminar and insists to this day that covered calls are the way to go. Last I talked to him, he had successfully turned $100,000 into $25,000 in the last 18 months. And he hasn't even started to implement the channel strategies wade taught him!
  9. Well, well, well............ What have we here??? ? Is it a hypocrite?

    Look, you're on a traders forum so I gather you're a trader. How do you make your money if not 'at the expense of others'? Hmmmm....? ? ?...

    All that matters is money. Greed is good. etc. etc. etc......

    If you know anything about the real world its all about money. If you don't screw someone for bucks, somenone will screw you. Decimate or be decimated, its that simple. Trading, life whatever.

    A sucker is born everday, and Wade just found a way how to get money from them.

    Just a thought,

  10. CalTrader

    CalTrader Guest

    Trading is a legitimate business. There is no pre-requisite to "screw" anyone to make money: you dont have to deceive anyone to be a trader. A trade is a trade. Both parties enter into the markets realizing that a particular trade may or may not be to their advantage. If not then they are free to limit their losses and try again. Its a free market. When someone takes the other side of my trade I assume that it fits into their trading plan: nothing more.

    If you enter into a business endeavor with the intent to knowingly deceive people to give you their money, and you give them (knowingly) nothing of value in return, then you should be held liable to return their money plus substantial damages.

    Its not okay to rip people off - although apparently in your philosophy of life this is OK. ... Outside of trading I guess we wont be doing business: you wouldn't pass the background investigation.
    #10     Jan 28, 2003