New York Times and USA Today Accepting Advertisements from Penny Stock Scammers

When it comes to journalism, there's a taboo about writing anything critical of the company that you work for. They're the one signing your pay-check, and chances are you would like to continue to receive that pay-check so most writers are extremely hesitant to write anything negative about the company that they work for. One New York Times writer busted this trend and lambasted the Times for running advertisements that are blatant penny-stock scams, and the Times actually published it!

A traditional penny stock scam occurs when a scammer buys shares in a company that has a stock price under that of $1.00. The scammer then goes and creates a buzz about the company on the internet, through faxes, or cold calling and tries to get other people to believe that this product is one hot stock. Victims purchase the stock thinking they've got some hot stock market tip and thinking that they will make a quick buck. The price of the stock rises, the scammer sells his or her initial investment often making a 200% or 300% gain on their money, and everyone else is left to fend for themselves.

Penny stock scam artists have long been using fake press releases and other medias to try to get the word out about their next big "find" in the market, but recently they have become emboldened and some penny stock scam artists were buying full page ads in the New York Times at a rate of $37,5000 per page! Some of these penny-stock scam artists had ad schedules in the NYT and USA Today that were worth a quarter of a million dollars!

Many individuals thought that the advertisements must have been legitimate since they were published in such major papers, but that's not the case. Both the New York Times and USA Today have policies which allow advertisers to market securities registered with the Federal Trade Commission, but rarely ever look into the advertiser and make sure they are legitimate. The papers do pull the ads if they do figure out that it's a penny-stock scam being advertised, but they don't necessarily do the most thorough job in doing so.

Just because an advertisement is in a seemingly reliable source does not mean the solicitation is legitimate. It's almost impossible for major media companies to vet each one of their advertisers and determine if the company is on the up and up. Remember that advertisements are paid propaganda, not actual news. Someone is always trying to sell you something and make money off of you, that's why they purchased the ad! Never follow a recommendation to buy or sell any product or security based on one advertisement. Do your own independent research to make sure that the action you are taking will make sense from a financial perspective.