Hoax Museum Blog: Business/Finance

The Teenage Stock Market Genius Who Made $72 Million

New York Magazine has egg on its face after running a story claiming that a 17-year-old Stuyvesant High School student made $72 million on the stock market. Within a day, the New York Observer debunked the story, revealing that the actual amount the student made was $0. The kid hadn't even done any real trades, only simulated ones for the school's investment club. more…

Posted: Wed Dec 17, 2014.   Comments (0)

Posted: Fri Nov 07, 2014.   Comments (0)

Marlboro Marijuana Cigarettes —

The latest fake news story to go viral claims that, due to the legalization of marijuana in Colorado, Philip Morris has decided to start selling Marlboro Marijuana Cigarettes, marketed under the brand name "Marlboro M".

The fake news story was posted on the satire site "Abril Uno" on January 21st. From the article:
Phillip Morris, the world’s biggest cigarette producer, announced today that they will join the marijuana legalization bandwagon and start producing marijuana cigarettes. Marketed under the brand “Marlboro M”, the cigarettes will be made available for sale through marijuana-licensed outlets in the state of Colorado, and the state of Washington when it becomes commercially legal there later this year...

Since only tobacco products are currently banned in advertisements and promotions in the United States, Phillip Morris also has set aside a huge $15 billion advertising budget just to promote the new “Marlboro M” and are now negotiating with major networks and publishers, to start marketing the product to consumers in the beginning of 2015...

Phillip Morris shares hit an all-time high on the marijuana news and shot up to $998.00 from $83.03 just a few hours after the announcement went public.

It seems like more and more fake news sites are popping up every day. For instance, Abril Uno (which is Spanish for April 1st, i.e. April Fool's Day) only came into existence on January 14, according to the whois data. And less than two weeks later, they've already got a viral story.

On the subject of marijuana cigarettes, the Legends & Rumors site notes that back in the 1960s and early 70s a rumor circulated alleging that the big tobacco companies were eagerly anticipating the day when pot would be legal, and that many of them had already registered names for their planned marijuana cigarettes. In March 1971 tobacco-company executives sent letters to Rolling Stone magazine denying these rumors.
Posted: Mon Jan 27, 2014.   Comments (1)

The Samsung Pays Apple in Nickels Rumor — In August 2012, a jury awarded Apple over $1 billion in damages in their patent infringement case against Samsung. This sparked a rumor that Samsung had gotten its own back against Apple by paying the fine entirely in nickels — sending 30 trucks full of nickels over to Apple's headquarters.

A video of a bunch of delivery trucks driving down a city street was offered as confirmation of the rumor — although the trucks in the video weren't from Samsung. A picture also circulated showing coins pouring down a ramp in some warehouse setting.

The Guardian posted a good article debunking the rumor, pointing out:
  1. The fine wasn't yet payable, because the judge hadn't made his decision.
  2. Private businesses are not required to accept any form of coin or currency as payment, despite a popular belief to the contrary.
  3. It would require 2,755 trucks to transport that many nickels, not 30.
  4. There's probably not that many nickels in circulation.
  5. The "payment in nickels" rumor originated from El Deforma, an Onion-like Mexican website specializing in fake news.
Several days ago (Nov. 21) a new jury decision was announced in a retrial of the damages. Samsung now only has to pay Apple $290 million. But that appears to have started the "payment in nickels" rumor circulating again.

I can think of several real-life cases of people who paid fines or fees in coins, just to be annoying. For instance, Washington resident John Patric perennially ran for state elections during the 1950s and 60s, and always insisted on paying the filing fee with loose change. He also always listed his name as "John 'Hugo N. Frye' Patric".

In 2012, Thomas Daigle of Massachusetts carted 62000 pennies to the bank to make his final mortgage payment. [ABC News]

And also in 2012, a man calling himself "Bacon Moose" paid a $137 traffic fine with 137 dollar bills, all folded into origami pigs. [HuffPost]
Posted: Sat Nov 23, 2013.   Comments (2)

Are 10 percent of wall street workers psychopaths? — We recently got to see an example of how a bogus fact takes root and spreads — that fact being that 10 percent of wall street workers are clinical psychopaths.

It started with a study titled "Corporate Psychopathy: Talking the Walk" published in the April 2010 issue of the journal Behavioral Sciences and the Law. Its lead author was Robert Hare, a specialist in the study of psychopathy. Hare had the opportunity to study 203 corporate professionals participating in a management development program. As part of this study, he conducted psychopathy assessments on the individuals, thus producing some of the first scientific data on psychopathy in the business world.

In the intro to the article, Hare noted that before his study almost no research had been conducted on psychopathic behavior in the business world, despite the widespread belief that, "Not all psychopaths are in prison. Some are in the Boardroom." This was because it was very difficult to obtain the cooperation of businesses. No company wanted to expose itself to outside scrutiny that might produce embarrassing revelations. Hare's study was only possible because he had cultivated a relationship with the company for many years. But even so, the company insisted on full anonymity. And Hare admitted that the group of 203 professionals was not a true representative sample of the business community. Still, it was better than nothing.

Hare's Results
Hare found that levels of possible psychopathy were somewhat elevated among the corporate professionals he studied — higher than one would expect to find in a sample of the general population:

"several investigators have used a PCL:SV score of at least 13 as an indication of 'potential' or 'possible' psychopathy... In our corporate sample 5.9% of the participants had a score this high, compared with 1.2% in the MacArthur community sample."

Furthermore, there were some interesting characteristics of those individuals who scored high for possible psychopathy:

"some with very high psychopathy scores were high potential candidates and held senior management positions: vice-presidents, supervisors, directors. This provides support for the argument that some psychopathic individuals manage to achieve high corporate status...

"high psychopathy total scores were associated with perceptions of good communication skills, strategic thinking, and creative/innovative ability and, at the same time, with poor management style, failure to act as a team player, and poor performance appraisals (as rated by their immediate bosses)...

"our finding that some companies viewed psychopathic executives as having leadership potential, despite having negative performance reviews and low ratings on leadership and management by subordinates, is evidence of the ability of these individuals to manipulate decision makers. Their excellent communication and convincing lying skills, which together would have made them attractive hiring candidates in the first place, apparently continued to serve them well in furthering their careers."

Hare's data transforms into a bogus fact
An article titled "The Financial Psychopath Next Door" by Sherree DeCovny ran in the March/April 2012 issue of CFA Institute magazine. In this article, DeCovny declared:
"Studies conducted by Canadian forensic psychologist Robert Hare indicate that about 1 percent of the general population can be categorized as psychopathic, but the prevalence rate in the financial services industry is 10 percent."

It's not clear where DeCovny came up with the 10 percent figure. She seems to have invented it. Hare later told John Grohol, the editor of World of Psychology, that, "I don’t know who threw out the 10 percent, but it certainly did not come from me or my colleagues."

However, the 10 percent figure quickly caught on. After all, it's the kind of figure that sounds like it should be true. People want to believe it.

It was first repeated by an article in theweek.com, "Why is Wall Street full of psychopaths?" Then the news aggregators Business Insider and Huffington Post picked it up, spreading the bogus figure far and wide.

Finally, it landed in the opening paragraph of a May 12 op-ed by William Deresiewicz in the New York Times, Capitalists and Other Psychopaths.

THERE is an ongoing debate in this country about the rich: who they are, what their social role may be, whether they are good or bad. Well, consider the following. A recent study found that 10 percent of people who work on Wall Street are "clinical psychopaths," exhibiting a lack of interest in and empathy for others and an "unparalleled capacity for lying, fabrication, and manipulation." (The proportion at large is 1 percent.) Another study concluded that the rich are more likely to lie, cheat and break the law.

It was at this point that fact-checkers began to cry foul. A week later, the Times published a correction and altered the opening paragraph of Deresiewicz's piece to eliminate the bogus piece of information.

In its correction, the Times noted, "[Hare's] study found that 4 percent of a sample of 203 corporate professionals met a clinical threshold for being described as psychopaths, not that 10 percent of people who work on Wall Street are clinical psychopaths." This is interesting because I'm not sure where they're getting that 4 percent figure from. What I see in Hare's study (which I quoted above) is that he found 5.9 percent of his sample to meet the criteria of being possibly psychopathic.

Anyway, it's clear that it's incorrect to state as a fact that 10 percent of wall street workers have been found to be clinical psychopaths. Hare's study, from which the bogus fact derives, didn't examine wall street professionals. It didn't produce a 10 percent figure. And it wasn't a representative sample.

It's actually possible that 10 percent of wall street workers might be psychopaths. Or the figure might be even higher: 20 percent or 50 percent. We simply don't know, because a group of wall street workers has never been examined for this trait. And as Hare suggests, it's unlikely they ever will be, because no investment bank is going to throw open its doors to psychologists for a study of the psychopathic tendencies of its employees.

Links: A game of telephone fools the Times, cjr.org; How Crazy Is Wall Street, New York Times?, the Daily Beast.
Posted: Wed May 30, 2012.   Comments (3)

Marl the Stock-Picking Robot — Accipiter already posted about this in the forum, but the story is odd enough that it deserves to be on the front page.

Back in 2007, two teenage twins from North Tyneside, Alexander and Thomas Hunter, began selling a stock newsletter in which they recommended stocks supposedly selected by an AI robot named Marl. Investors could also pay to get advice through a variety of websites run by the twins, daytradingrobot.com, doublingstocks.com, and equitypromoter.com. Or would-be millionaires could get a version of Marl to run on their computer at home. The brothers advertised that "The longer Marl is allowed to run on a computer… The More Advanced He Becomes!"

The reality: Marl didn't exist. It was the twins who were picking the stocks. The home version of Marl simply displayed whatever ticker symbols the brothers told it to. And often they would pick companies that had paid for that honor. Links: Yahoo! Finance, BBC News

The brothers' websites no longer are up, and they were never archived by the wayback machine. But here's a few of their banner ads that I managed to find:

Posted: Mon Apr 23, 2012.   Comments (0)

Trojan Houses, or Mobile Homeless Homes —

Outraged homeless muppets to converge on Goldman Sachs

NEW YORK, April 21, 2012 -- Homelessness is a great American tragedy. Our financial system and government have let us down and we, together, must take a stand to change the way the system works. With over 11 million homes underwater and millions in foreclosure, people are frightened, distressed and angry.

Although not a cure, Mobile Homeless Homes (MHH) offers a temporary solution -- low cost alternative living spaces for the millions of upside-down, underwater or foreclosed homeowners who have lost their houses due to the banking crisis that caused the real estate collapse. The MHH centerpiece is a camouflage, stealth, mobile home made from a series of connected plastic garbage cans, propelled by a tricycle, that will be undetectable by authorities. It blends into any urban environment.

Designed by artist Joey Skaggs, this Trojan house has been created to focus attention on the disastrous effects of government deregulation on the welfare of the general public and to underscore the fact that people are not powerless to create change; that people should not be afraid to use their First Amendment rights to denounce actions they believe are unethical and criminal.

On Monday, April 23, 2012 beginning at 11:00 a.m. at 287 Spring Street (between Varick and Hudson) in New York City, Skaggs will parade his Mobile Homeless Homes prototype down to Goldman Sachs. He will be accompanied by his troupe of costumed muppets including the Fresh Juice Party band, performing their original ""Mobile Homeless blues"" ballad (lyrics). They will head from Spring Street to West Street and then down West Street to Goldman Sachs at 200 West Street. Other targeted sites will be announced at a later date on the MHH website.

Goldman Sachs has been selected as the destination for the MHH debut as it is one of the primary companies responsible for causing the housing crisis. The muppets are there to help hold them accountable, because Goldman Sachs employees commonly have disrespectfully referred to their clients as muppets. The word muppet in British slang is a derogatory term commonly used to mean idiot or loser.

"I'm not a bank regulator. I'm not a legislator. I'm not a politician. I'm an artist. I believe it's my responsibility to do what I can to bring attention to the issues and inspire our lawmakers to make the critically necessary changes to protect the public from greed and fraud," says Joey Skaggs.

The MHH performance has been designed to be a fully legal public expression of individual rights. With the current rash of arrests of Occupy Wall Street protestors and the forcible removal of personal belongings from people sitting peacefully in parks, Skaggs says the MHH procession will be on the move at all times, except when waiting for street lights to change. And, since Mayor Bloomberg just the other day kissed Ms Piggy and announced that the Muppets (of Sesame Street fame) are now the official New York City family ambassadors, it might prove embarrassing if the police arrest Ms. Piggy as she exercises her First Amendment rights.

For more information, contact:
Joey Skaggs, 212-254-7878
[email protected]
http://mobilehomelesshomes.com (coming soon, check back)

Posted: Sat Apr 21, 2012.   Comments (3)

Bank of America Declares Man Dead — If you're declared dead on twitter, it doesn't mean much anymore — especially if you're Justin Bieber. But if a major bank declares you dead, that can really screw up your finances if you happen to still be alive. This happened to Arthur Livingston (who lives, oddly enough, in a town called Prosperity).

Bank of America reported him dead. Livingston only found this out when he tried to get a new mortgage. But no one would loan him money because he was supposed to be dead. It cost Livingston thousands of dollars to sort out the mistake. Bank of America has apologized, but of course, it hasn't offered him any compensation for its screw-up. Link: ABC News.
Posted: Wed Mar 14, 2012.   Comments (0)

Turning Yankee dirt into gold —
<# some text #>
Mark Hayward
A pile of dirt may not be worth much money. But a pile of dirt that was once beneath Yankee Stadium could potentially have more value. Especially if that dirt was packed into key chains and other corporate gift items and then sold at a big markup in sporting goods stores.

That was the pitch Mark Hayward used to convince a victim to give him $35,000 -- as an investment in this Yankee dirt scheme. As far as I can tell (the news report isn't really clear) Hayward never had the dirt in question. Eventually the victim got suspicious. And now Hayward is facing charges of first-degree larceny. Link: ctpost.com.
Posted: Tue Jan 17, 2012.   Comments (0)

$16 Muffins — The legend of Out-Of-Control Government Expenditures is alive and well. Back in the 1980s, reports of the US government paying $400 for a hammer and $600 for a toilet sparked outrage. And now, late last month, came the news that the Justice Department had paid $16 a piece for muffins at a 2009 conference. But just as the hammer and toilet weren't really as expensive as they seemed, it turns out that the price of the muffins was an artifact of accounting. The $16 included the entire continental breakfast, service, and taxes. Of course, while the government may not be paying premium price for muffins, those bailouts to the bankers did seem a little steep.
Posted: Thu Oct 06, 2011.   Comments (2)

The Case of the Honest Trader — On Monday (Sep 26) an "independent stock trader" named Alessio Rastani appeared on an interview with the BBC to discuss the Eurozone debt crisis. As the interview progressed, it became apparent that Rastani was far more blunt and cynical than most people from the financial community are when talking in public. For instance, in response to the question, "What would make investors more confident?" he came out with this:

I'm a trader. If I see an opportunity to make money, I go with that. Most traders, we don't really care too much how they're going to fix the situation. Our job is to make money from it. And personally I've been dreaming of this moment for three years. I have a confession. I go to bed every night and I dream of another recession. I dream of another moment like this.

Later in the interview he declared:

Governments don't rule the world, Goldman Sachs rules the world.

Watch the interview yourself:

His remarks and demeanor seemed so over the top, that people began to wonder whether he was hoaxing everyone by parodying the cutthroat morality of financial traders. Some people suspected that he was one of the Yes Men — pointing out that he bore a slight resemblance to Andy Bichlbaum of the Yes Men who had perpetrated the Dow Chemical Hoax during an interview with the BBC in 2004.

Rastani, when challenged, insisted he was real, and the Yes Men said he wasn't one of them. So it appears that Rastani wasn't trying to pull anyone's leg. He was voicing his genuine opinions.

Personally, when I watch the video I don't sense that he's being satirical. Traders tend to be slightly megalomaniacal, attracted to high-risk situations, and convinced that they're smarter than everyone else. He fits the personality type perfectly.

I think Rastani's interview demonstrates Poe's Law — as applied to the world of stock market trading. Poe's Law states: "it's difficult to distinguish between parodies of religious fundamentalism (or, more generally, parodies of any crackpot or extremist belief) and its genuine proponents." In other words, the financial community nowadays is full of crazies. When you listen to them you think, they've got to be joking! But no, they're totally for real.
Posted: Wed Sep 28, 2011.   Comments (2)

Reusing your hotel towels: sensible behavior or scam? — Jill Hunter Pellettieri writes in Slate.com about how she hates those notices you now find in all the hotels asking you to re-use your towels in order to "Save Our Planet." Like her, I find them to be disingenuous. The real beneficiaries are the hotels, not the environment, because the hotels save lots of money on laundry costs, and they don't bother to pass those cost-savings along to the customers. [slate.com]
Posted: Tue Apr 07, 2009.   Comments (24)

Worst April Fools? — An online brokerage, Zecco, pretended to give customers multi-million trading accounts on April 1st. Funny until customers began doing actual trades with the money. Lots of blogs were linking to this story, calling it the worst April Fool's ever. (I'm not sure about that. It's still not as bad as some on the official list.) But now the company is saying it was an accident, not a purposeful prank.
Posted: Mon Apr 06, 2009.   Comments (0)

The AIG Bonuses — In response to the uproar over the millions of dollars in bonuses paid to the executives of AIG (you know, that company that would be bankrupt if not for the billions of dollars in loans it's taken from the US government), AIG management explains that it had no choice but to pay those bonuses because it was contractually obligated to do so. The Treasury Department, despite wagging its finger sternly at AIG, appears to accept that argument.

On salon.com Glenn Greenwald details why AIG's argument is transparently bogus. Contracts get renegotiated all the time when companies are in financial jeopardy. So what makes these contracts untouchable?

The truth must be that it's either a) a case of blatant cronyism, or b) the executives have some leverage that would make it more painful NOT to pay them than to pay them. (The latter argument is detailed here.)

What confuses me is the use of this word "bonus". Evidently these guys expect this money regardless of their own job performance or of how well the company does. In which case, shouldn't the payment be called "guaranteed compensation" or something similar? Calling it a bonus makes it seem analogous to the tip a waiter receives for good service.
Posted: Mon Mar 16, 2009.   Comments (10)

Forbes not being sold to the Russians — The business magazine Forbes "absolutely denies" a rumor that it's being bought by a Russian private equity firm, Onexim.

The irony here is that it was Forbes, back in 1991, which published a hoax claiming that the Russian government, desperate for foreign currency, was selling the embalmed body of Vladimir Lenin to the highest bidder.

Times and fortunes have changed. It appears now the shoe is on the other foot.
Posted: Wed Nov 26, 2008.   Comments (0)

Rumormongering Traders — Britain's Financial Services Authority has found a new group to blame for the financial crisis: naive traders spreading rumors. It cites one example of a trader who "spread a piece of 'hot news' to 10 to 12 of his friends over a messaging system without making clear that it was a rumour. One of his contacts then did not hesitate to spread the message on to 150 of his contacts."

To counter the problem, the FSA is urging companies to adopt policies "on how to deal with rumours and monitoring chat sessions, phone calls and emails from traders."

Good thing it's tackling this problem. And once it's succeeded in making the stockmarket perfectly sane and rational, perhaps it would consider cleaning up the internet as well.
Posted: Wed Nov 19, 2008.   Comments (2)

Is Bank of America cancelling the majority of its customers’ credit cards? — This rumor is going around:

BoA to close credit cards for approximately 60% of customers?

"I work in Credit Department at BoA (Senior Level Credit Analysist Boa Bldg 3rd fl, Char, NC). We just received memo indicating that all BoA credit cards are being closed as of 10/1. Credit score and income do not matter, all accounts are closed as of 10/1." Executive VP Bank of America

"This is true, but not as bad as he/she says. We are closing accounts, but only ones with credit scores under 750. We will reopen cards within a year as long as crisis lessens." - J.mcmanus / VP Credit Dept BOA

The news is sourced to iReport.com. If true, it would be another sign of the deepening financial crisis on Wall Street, but Bank of America doesn't have any info about this on their website, so my guess is that the rumor is false.
Posted: Mon Sep 29, 2008.   Comments (29)

Weird Fragrances — I stumbled across this site, weirdfragrances.com (I'm not linking directly to them, so I won't boost their google rank), that promises to send you a free sample of cologne. In return you simply provide them with your email and mailing address, and promise to later answer a few questions about the fragrance. You can choose from a variety of offbeat scents such as Grease Monkey, Burning Rubber, or Ash Tray.

Is it a legit offer? I would guess not.

First, it strikes me as odd that the site is registered anonymously through domains by proxy. Why would a legitimate company be trying to hide their identity?

Second, a quick google search reveals people posting on forums about how they submitted their info but never received anything except spam. So it appears to be a spam trap.
Posted: Tue Sep 23, 2008.   Comments (2)

It’s Right-Sizing, not Down-Sizing — Media Agency Carat recently decided to lay off some of its employees. PowerPoint and Word documents somehow leaked out detailing how management planned to inform employees and clients of the decision. They offer an example of corporate b.s. at its finest. Details include:

• The agency wasn't going to be down-sizing. Instead, the documents repeatedly described the moves as a "right-sizing" of the agency.

• Clients were to be informed of the "staffing change" with this script: "Mary Smith will be moving off your business. Now that we understand your business better, we are replacing her with someone whom we feel will be a better partner for you."

• The remaining "critical talent," who might understandably be "questioning if this is the right place for them to build their careers" were to be reassured with this script, "The actions we had to take, although unfortunate, were necessary to right-size the company and ... bring in the skill sets we need to effectively service our business and future client needs."

Full details at AdAge.
Posted: Thu Sep 11, 2008.   Comments (11)

Thieves Steal Fake Money — Thieves used a hammer to break open a plexiglass box being used as a Drop-A-Note donation box in the Kentucky Theatre's lobby, and they stole the money inside. Unfortunately for the thieves, the money they took was fake. From kentucky.com:

"It's sad when idiots can't tell fake money from the real thing," said Steve Brown, president of Kentucky's Mighty Wurlitzer Theatre Organ Project, a group dedicated to restoring a Wurlitzer organ and returning it to the Kentucky. Proceeds from the Drop-A-Note box, which is three wood organ pipes with a space for donations in the middle pipe, go to the restoration project. The fake bills looked similar to real ones, but they didn't have serial numbers and were black and white, Brown said. The thieves, who struck early June 2, made off with little or no money because the box had been emptied that weekend.

The thieves were probably former convenience store clerks, fired for accepting too many George Bush and Santa Claus bills.
Posted: Sun Jun 22, 2008.   Comments (1)

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