Lenny Dykstra saga continues.. He duped cramer with "behind the scenes" stock promo..

Discussion in 'Wall St. News' started by pavlov0032, Jun 28, 2010.

  1. http://www.timothysykes.com/2010/06/the-jim-cramer-penny-stock-scandal-by-the-coward-randall-lane/

    The Jim Cramer Penny Stock Scandal By The Coward Randall Lane
    Posted by Timothy Sykes on Mon 28th of Jun, 2010 02:39:05 PM

    As I wrote a few weeks ago, the failed Trader Monthly magazine editor-in-thief, as several ex-employees refer to him, Randall Lane, has been writing his memoirs these past few months, exploring all the angles of what it’s like to bankrupt not just one but two magazines and deserve the absolute hatred of just about every person I talk to in the financial publishing world.

    The guy owes money to nearly half a dozen financial writers and is the subject of one of my most popular blog posts ever.

    But as an editor-in-thief who won’t stay down, he’s turned to his latest writing gig at The Daily Beast (along with reviewing NYC’s top restaurants???), he’s resorted to implicating Jim Cramer and his prodigal son Lenny Dykstra in a nasty penny stock promotion scandal in the article below.

    Shady Randall Lane claims shady Jim Cramer employee Lenny Dykstra took “$250,000 worth of secretly issued stock—in exchange for recommending that stock to TheStreet.com subscribers” which makes Jim Cramer shady for recommending shady Lenny Dykstra as anything other than a thug (I’ve written about Dykstra too)

    Subscribers to my 4 newsletters and students of my 10 instructional DVD packages know this kind of corruption goes on all the time and the beautiful thing is that its predictable enough to be consistently profitable for those who learn to identify it. As Jim Cramer’s ratings and TheStreet.com’s ratings prove, nobody expected much from them anyway, but this is a great example of why I’ll probly NEVER have anyone else writing on my site–it’s just too easy to take a big wad of cash from some junky penny stock and pass it off as a real pick…scandalous but true.


    It’s early in this case as Randall Lane’s word is about as solid as his financial publishing reputation (absolute shit), so read the article below and let’s see how this thing plays out…Cramer has made a ton of enemies over the years so I wouldn’t be surprised to see them pounce on this and make it bigger than it probly is:

    Oh and please do try to ignore the passages that require further editing such as:

    “I was running a company I had co-founded: Doubledown Media…” should read “I was running a company into the ground…”

    Jim Cramer Stock Touting Scandal
    by Randall Lane

    The stock guru’s top pupil, baseball star Lenny Dykstra, was secretly paid to plug stocks on TheStreet.com and give access to Cramer, reveals Randall Lane in his new book, The Zeroes.

    In an era of epically wrong financial predictions, boisterous Jim Cramer’s declaration that “Bear Stearns is not in trouble!” a week before its March 2008 collapse, rated among the most moronic, or at least the most infamous.

    But it turns out that Cramer made one call far worse: He decided to make a stock-picking star out of a mumbling former Major League Baseball All-Star named Lenny Dykstra, giving him a high-profile column and ultimately an expensive “premium” newsletter on Cramer’s site TheStreet.com. How did Dykstra return the favor? As I reveal in my book, The Zeroes: My Misadventures in the Decade Wall Street Went Insane, Dykstra took money—$250,000 worth of secretly issued stock—in exchange for recommending that stock to TheStreet.com subscribers. He also promised access to Cramer in exchange for the stock, which he apparently hid under his brother-in-law’s name.

    It was Cramer’s repeated endorsements—echoed by de facto validation from everyone from CNBC to me—that enabled Dykstra to pull off the scheme.
    Jim Cramer single-handedly created the concept of Dykstra-as-financial genius. Known mostly for his willingness to crash his body into walls or his cars into trees (nickname: “Nails”), the former New York Met and Philadelphia Phillie became an investment columnist for TheStreet.com in 2005, after sending Cramer an unsolicited email. For the next four years, Dykstra made stock picks, focusing on “deep-in-the-money calls”—a way to buy leveraged options—for tens of thousands of followers on Cramer’s website.

    “Not only is he sophisticated, he is one of the great ones in this business,” Cramer told HBO’s Real Sports in 2008. “He is the one of the great ones… a guy who applied the same skills to money that he applied to sports, it’s brilliant.” Cramer added that there are only “four or five” people in the world he would take stock picks from—and Dykstra was one of them.

    Cramer, I am sure, had no knowledge of Dykstra’s “pay to plug” scheme—an arrangement that could well lead to a Securities & Exchange Commission investigation. He was just a dupe. But his relentless endorsements and promotion of the ballplayer’s stock-picking over the years must now surely rank as his most ill-conceived.

    Cramer’s effusive blessing, and the fact that his highly legitimate TheStreet.com tallied Dykstra’s impressive track record (as late as last year, Dykstra bragged on the site that he had picked 96 winners against only one loss) impressed everyone from CNBC to The New Yorker. It also, for a time, impressed me.

    I was running a company I had co-founded: Doubledown Media, which produced glossy magazines like Trader Monthly, Dealmaker, Private Air, and other titles for the rich and profligate.

    Lenny Dykstra called me in 2007 as randomly as he had called Cramer, and within 24 hours he hired me to produce The Players Club, a financial advice magazine for professional athletes. Dykstra introduced me to his athlete buddies, everyone from John McEnroe to Tim Brown to Keith Hernandez. But he was especially proud of his friendship with Cramer, a relationship he waved around like a magic cloak of legitimacy. He’d play me Cramer’s voicemail messages, or forward me their emails back-and-forth.

    Given that hundreds of people were already slavishly emulating Dykstra’s picks—and given how good his track record was, at least according to TheStreet.com—I suggested that he start a paid financial newsletter, an opportunity he jumped at. For six months, we developed the name, hired staff, and tested the price ($995 per year). Some $87,000 in subscription money rolled in before Dykstra even wrote his first newsletter.

    And then, in April 2008, he abruptly took the newsletter from us and put it under TheStreet.com’s umbrella. Helped by the marketing muscle of TheStreet.com, Dykstra quickly sold roughly $1 million in newsletter subscriptions.

    Dykstra also left us with hundreds of thousands in unpaid bills for the magazine we were publishing for him. In the course of our ensuing legal fight—and then doing reporting for my book The Zeroes—I stumbled across his Cramer-for-sale scheme.
  2. Sykes, the guy who has his mother come over to clean his toilets and wash his stained undies.

    Not making it up/