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The following is from a TV news story last month in Seattle--
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Wade Cook lives in the large ranch home in the Pacific Northwest.
Today, he lives in a 5,000-square-foot ranch. He employs 500 people
from his Tukwila headquarters. Wade Cook is building his financial empire.
“I’m not worth as much as Bill Gates, but watch out, I’m coming to get
you,” Cook told KING 5 News.
It appears to be the story of a local Tacoma boy who made it big, but
the Wade Cook success story is not that simple.
Some investigators say Cook’s stock strategies don’t live up to his
promises. Some former employees say what Wade Cook teaches has really hurt
some people financially.
And then, there are his legal and financial troubles across the country.
It’s all part of the Wade Cook story.
So what exactly is Wade Cook selling? For his two-day workshop, students
are will to pay $3,000-$5,000.
“I probably would have even paid $10,000 for it, I mean, it’s just
awesome,” said Juanita Velasquez.
Most people never meet or even see Wade Cook.
He sends dozens of his instructors traveling from city to city teaching
up to 50 seminars a week.
Cook’s strategy is to trade stock, quickly and often. Cook claims you
can make money on the small price swings, but when his ads promise 300
percent annualized returns, or to double your money every 21/2 to four
months, state regulators say there is some concern.
“If you think about that, if you invest $1,000, five years later you
should have $6 billion,” Department of Financial Institutions spokeswoman
Deborah Bortner.
Cook makes no apologies for his advertisements. He says during seminars,
some of the examples given, would double your money.
Once you sign up for a seminar, the sales pitch continues. Instructors
urge students to pay extra to stay in touch with Cook’s trading department.
Former Wade Cook Financial Corporation employee Barbara Masters assisted
investors.
For $2,000 a year, students can follow Cook’s trades on the Internet
after they take the seminar. For another $1,700 a year, Cook’s company will
page you whenever Cook sees a trade opportunity.
“These are people that are real people making real money that are now
paying off the debts for their church and they’re adopting babies and
they’re doing things with the money,” Cook said as he taught one seminar.
There are Wade Cook audio tapes, Wade Cook videos, even Wade Cook
sportswear.
At one class, KING 5 News found two state lawmakers perfectly willing to
pay for the seminars.
“I more than doubled my portfolio in two months,” said Dave Schmidt.
“Last year was the most stressful year of my entire life, excruciating
pain,” said Mark Evans says he spent $10,000 on Wade Cook products. “We
lost, my estimate right now, and again this is painful to us, about $65, 000.”
Bob Gulrajani used to work for Wade Cook so he tried Cook’s strategy
with his retirement account money.
“Oh I lost about $3,500 on it,” Gulrajani said.
Barbara Masters, another former employee and top manager who Cook
acknowledges in his book, told KING 5 News her job included talking with
some distressed students.
“I do recall one gentleman losing his $40,000 retirement that he had
invested,” Masters said.
Pravin Davrey who was one of Cook’s brokers says part of Cook’s strategy
can be risky because it involves what are called stock options.
He says some of the people who are drawn by Cook’s charisma are ordinary
people who don’t have money to lose.
“My reaction to that is, I think you know just enough to be dangerous,
to yourself,” Davrey said.
Cook says the people who lost money weren’t following his formula correctly.
The Puget Sound businessman scans a schedule of upcoming seminars around the
country.
Last year, Wade Cook’s company reported to federal authorities that
it lost $800,000 in the market; this from the same company that says you can
double your money.
“If the program is such a fail-safe program, why isn’t his company
making money trading securities?” asked Bortner.
Cook acknowledges his company’s investments lost money last year, but he
said he’s ahead by about the same amount so far this year.
KING 5: “If your strategies work so well, why don’t you just do your
strategies, instead of teaching all these seminars. You’d be the richest man
in the world right?”
COOK: “I am very, very wealthy. I am one of the richest people around.”
Cook’s Company blames its market losses on accounting and cash flow
problems. When asked by KING 5 News if Cook would reveal his personal stock
accounts, Cook agreed.
“Yeah, I can show you that,” Cook said.
But to date, Cook hasn’t shown KING 5 News the paperwork. He did admit
most of his money hasn’t come from the market.
KING 5: “Has the strategy worked for you?”
COOK: “You make more money teaching it. We make more money selling our books
in the bookstores. You make more money teaching seminars.”
Every week, hundreds more are attracted by the Wade Cook image. He’s a
devout Mormon, a former missionary and a father to five.
Investors listen closely as Wade Cook teaches financial strategies.
But he did file twice for bankruptcy in Arizona, in 1987 and 1989.
This year, he paid that state nearly $500,000 in restitution and fines to
settle charges he sold unregistered securities.
“When I go back and scrutinize your whole life for the last 15 years,
did you ever have any financial problems? I think we all have,” Cook said.
Even today, Cook’s seminar business faces investigations from federal
regulators and from authorities in Texas, in California and in Washington.
The scrutiny may be building, but it hasn’t slowed down the former cab
driver.
“It’s amazing the powers that be, that come up to stop people that are
successful. America loves winning, but they hate winners,” said Cook.
Even though state regulators have complained about Cook’s ads, they told
KING 5 News that the wording of the ads may be technically legal.
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At 08:41 PM 6/23/98 -0500, you wrote:
>
>Oh gag...
>
>I just received a glossy information packet in the mail today
>touting "best selling financial author and educator" Wade Cook's
>seminars and books. The pitch features "Outrageous Returns" and
>"Income Formulas" audio tapes.
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