In the 1987 movie Wall Street, after Bud Fox comes back from his first meeting with Gordon Gekko his manager at the brokerage firm says:
Where you been the last 3 hours, Fox? I wouldn't be sitting around chin wagging if I were you... plenty of names in that phone book to cold call...
I suppose once you have a little age on you, you have an opportunity to see things from a different perspective. As a “former” CPA I lived through the trying economic times of the Carter Administration and know what it was like to have mortgage rates at 16% and higher. It was during those times that it became strange – as a matter of fact – that cold calling for investments that frankly made no sense seemed to be at their peak. I recall the awareness that unsolicited investment calls were a second cousin to an outright scam as the caller clearly didn’t do his/her due diligence related to the investment they were hocking.
Personally I have no problem with folks who make a living soliciting customers; however, when the solicitation is blatantly focused on money from your pocket into theirs without due consideration to the investor and whether they are qualified to invest in what is being offered – strikes me as unethical and fraudulent.
So – where does this all come from?
For many who read this blog – you know I have been following closely the case in Houston, TX of Daniel Frishberg, Al Kaleta and David Wallace. It would be hard for a reasonable person – presented with the facts – to believe that these three stooges did anything but hock an investment concept to folks who were unqualified and ended up being scammed. But, today, unrelated to BizRadio and Daniel Frishberg, I got a call that reminded me of the old “Wall Street” movie days. The call went something like this.
Hi. Is this Chuck Gallagher?
Yes…how can I help you?
Chuck … I’m calling to talk with you about our oil and gas investment limited partnerships. We’ve only have a few units left and, considering the tremendous, return and tax benefits, I wanted to enroll you before this opportunity closed.
Thanks for the call but I’m not interested.
Chuck … considering your enrollment in the last quarter of this year will provide you a direct tax write off of $45,000 and we’ll guarantee a return of $250,000 on the investment – you can’t lose.
Interrupting…I stated: I’m not interested and hung up.
Here are some facts:
- I did not know the person soliciting my business
- He (the caller) had not done any due diligence on me – thereby knowing my investment strategy or needs
- The caller was offering something that, by its nature, I would have no interest in
- The caller was clearly “dialing for dollars” hoping that one of those “plenty of names in that phone book to cold call” would be interested in his offer
What happened today with the call I received has happened in many ways – some a bit different in approach – to others and most of the time, the investor looses!
Outside of the legal implications, do you think that unsolicited cold calling with the express purpose of seeking investors is ethical?
I’d like to know your thoughts and as always – YOUR COMMENTS ARE WELCOME!