Saturday, September 20, 2008

Maybach Financial -- Boiler Room?

In my never-ending quest for information on companies I might want to invest in, I happened across an independent broker research firm called Maybach Financial the other week. I signed up as a member to get access to some of their analyst reports on companies I already own and am thinking of buying, reasoning taht the more information I have, the better off I am, regardless of the source.


The fact that membership didn't cost anything was a huge red flag flag to begin with, but I figured there was no harm in trying. After about 20 minutes of surfing through their bare bones site (no search engine? what's that about?) I gave up and pretty well put the company out of my mind.

Until yesterday. My phone rang in the middle of the afternoon, and on the other end of the line was 'Dennis' from Maybach Financial, calling to see if I'd received all the information I wanted from the Maybach site. At this point, I'm assuming this is some sort of customer satisfaction survey -- until the conversation took a turn for the extremely suspicious.

It soon became clear what was going on. After some chit chat on the companies I had signed up for information on, Dennis launched into a sales pitch for a company called American Exploration Corp., a pink-sheet listed junior resources company. I don't tend to dabble in penny stocks -- particularly not resource companies with more exploration rights than actual mining operations -- so it seemed like an odd pitch to an investor who tends to go for multinational financial and infrastructure firms. But Dennis was not to be dissuaded.

"We're really high on the company," Dennis explained. "The stock's currently trading in a range between 8 and 9 cents, but we could easily see it in the 40-cent range very soon."

Thanks for the tip, Dennis, but no thanks. 

But ol' Dennis doesn't give up without a fight.

"The thing is," (he's basically whispering at this point, just for effect,) "the company has some news coming out soon so now is definitely the time to act on this. We've been talking to their head geologist and they definitely have some huge finds that they're about to release. I'm giving you this information because I think it's the kind of investment an investor such as yourself is interested in."

The large red warning flags in my head have, by this point, been upgraded to a giant, 12-storey neon sign flashing "PUMP AND DUMP SCHEME" with the entire sign resting atop a 60-foot blimp, made out of fire. With lasers.

After politely excusing myself from the conversation, I resolve to do a little digging around on both Maybach and American Exploration, since, you know, unsolicited investment advice from anonymous sources doesn't seem to me to be the sort of thing that legitimate companies do for a living, but what do I know: I'm just some shmuck with a website.

There may well be some honest explanation for all this, but based on my initial research in Maybach, I'm having a hard time seeing what it is. I'd welcome an explanation from the company (or anyone else out there) as to what the hell that was. Has anyone out there had any dealings with this? Or something similar?

In the meantime, I'm reminded of a clicheed lesson -- when it comes to free investment advice, you often get what you pay for.

Safe to say, I don't recommend anyone signs up for any product whatsoever from Maybach. I think a call to the company's consumer relations line -- if not the SEC -- is warranted.

27 comments:

Brandon said...

Sounds like a boiler room to me. I'm actually reading a book right now called "Contrepreneurs". It's about a bunch of Canadian run boiler rooms based out of Amsterdam that operated in the 80s. Most of the stocks they pushed onto investors were very similar to the one Dennis was trying to persuade you to buy--junior resource companies listed on the Vancouver and Alberta exchanges, and sometimes shares that weren't listed anywhere at all. Maybe we should send Dennis and Maybach a copy.

Ryan said...

I agree that this has scam written all over it, one of the stocks I own had some news pop up on the google financial site, this Maybach group said they had a detailed report on this company. I signed up and then couldn't find the information. They tried the same scheme on me when they called.

Canadian Capitalist said...

8 cents a share? That pretty much tells all you want to know about any company.

Anonymous said...

What do you expect from a guy who look the future through a crystal ball? Crystal balls are magnifying lenses. 4 cents may look like 4 dollars...

Anonymous said...

I have had a very similar experience from Maybach Financial. My guy was named Oliver. He tried pushing AWEC on me and his boiler room tactics made me livid. He said things like "its a sure thing" and "I'm 100% sure its going to go up," but then in the middle of the conversation said "now I can't tell you to buy or sell a stock." If the SEC looked two seconds into this company I believe they might find this company to be misleading people in their phone conversations. By the way after telling him off, he called me a couple weeks later and ran the same script as the first conversation until he realized who I was and quickly ended the conversation, only after recommending another penny stock, RVBF. I wouldn't talk to Maybach Financial representatives if I were you.
-DW

Ange - I Buy It Green said...

Here's my peoples:) I was wondering what the hell this company was about as well, because I'm being spamed with "Alt Energy BS Stock news letters". I was happy to read your post and all who had something too pitch in... Thanks you all - for keeping it real I'm really over lying scum bags (sorry) but damn enough already.
Peace and Love ;)

Ange- i buy it green said...

Here's my peoples:) I was wondering what the hell this company was about as well, because I'm being spamed with "Alt Energy BS Stock news letters". I was happy to read your post and all who had something too pitch in... Thanks you all - for keeping it real I'm really over lying scum bags (sorry) but damn enough already.
Peace and Love ;)

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This is a great post. I just had one of the ‘Doh!’ moments and ran back to correct my own site before publishing my comment. You see my own comment form did not match what I’m about to advice. I get less comment than you, so never noticed any problem. I’ve changed it now anyway so here goes.

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Anonymous said...

American Exploration: 12m high is USD 1.5; currently trading at USD 0.49 - wouldn't be a bad bet ;-)

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Anonymous said...

I do a fair amount of investing and have definately talked to my fair share of promotors. Usually they're full of crap, but it doesn't mean you can't make money off them. Guys like these put a lot of money into marketing stocks, and I've made some good gains by getting in on these before they hit full swing, then selling when the volume peaks. Its mostly the suckers who believe all the hype about what a great company it is that get left holding the bag.
Case in point, that AEXP actually hit over a dollar, and then slid back to the .09 level you were originally pitched at.

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Peter said...

My issue with these guys is they kept calling me like 2-3 times a week the 2-3 weeks leading up to Helix Wind (HLXW) stock crashing back in February of this year. Thankfully I didn't think much of HLXW, but that really makes me wonder why they kept wanting me to invest RIGHT before the stock went from $2.00 to nothing... very suspicious to me.

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By the way after telling him off, he called me a couple weeks later and ran the same script as the first conversation until he realized who I was and quickly ended the conversation, only after recommending another penny stock, RVBF.

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