Jim Cramer’s unfortunate defense of Bear Sterns was already noted in this space several months ago, but as The Daily Beast’s Randall Lane — author of the newly issued tome, ‘The Zeroes : My Misadventures In The Decade When Wall Street Went Insane‘ — points out, his association with former Met/Phillie Lenny Dykstra (above) wasn’t merely ill-advised, it was an total credibility-killer.
In the late winter of 2008, an entrepreneur named Richard O’Connor, who had become Dykstra’s favored adviser, introduced him to Shannon Illingworth, the founder of a publicly traded company called Automated Vending Technologies, or AVT, and the two quickly cut a deal. O’Connor told me that on March 25, 2008, Illingworth gave Dykstra roughly $250,000 worth of AVT stock in exchange for plugging the company on Cramer’s website, TheStreet.com, and promising to provide a personal introduction to Cramer.
O’Connor claims that Dykstra told him he knew the pay-to-plug arrangement was illegal. To avoid getting caught, O’Connor says, the former All-Star baseball player had a solution: “We can just put the stock in Keith’s name,” referring to his brother-in-law, Keith Peel.
And so it was done. O’Connor provided me copies of stock certificates showing that on March 25, 2008, Keith Peel was issued 250,000 shares of AVT stock, which traded at roughly $1 a share. “Keith didn’t know anything about it,” says O’Connor, maintaining that using Peel’s name was a way to stash the stock away from potential regulatory oversight.
The shares were held at Dykstra’s mansion, which is where O’Connor retrieved them. Just two weeks later, on June 6, 2008, Dykstra offered his premium subscribers a curious “bonus” recommendation: a plain old penny stock named AVT, “which gives investors a lot of potential upside.” Dykstra droned on endlessly about the stock, with all the conviction of a prisoner of war extolling the cause of his captors for the cameras.
Cramer, I am sure, had no knowledge of Dykstra’s “pay to plug” scheme”an arrangement that could well lead to a Securities & Exchange Commission investigation. He was just a dupe. But his relentless endorsements and promotion of the ballplayer’s stock-picking over the years must now surely rank as his most ill-conceived.
Elsewhere in the TDB article, Lane claims Cramer was warned by O’Connor of Dykstra’s pay-to-plug relationship with AVT, yet continued to allow the former NL MVP to write for The Street.com for another full year. Nor did Cramer respond to Lane’s accusations during the research for “The Zeroes”.
2 thoughts on “TDB’s Lane : Nails’ Street.com Picks Were Fraudulent”
Cramer, I am sure, had no knowledge of Dykstraâ€™s â€œpay to plugâ€ schemeâ€”an arrangement that could well lead to a Securities & Exchange Commission investigation. He was just a dupe.
I wouldn’t assume that at all. Cue the butt-kicking video clip from the Daily Show w/Jon Stewart from last year. “..you burned the fucking house down!” Find me a good guy in Wall Street and I’ll show you another ‘innocent’ victim running another ponzi scheme.
AVT Founder Describes Lawsuit Against Randall Lane
CORONA, Calif., July 8, 2010 — AVT, Inc. (formerly Automated Vending Technologies), (Pink Sheets: AVTC) (www.avtinconline.com)
In a letter to shareholders, AVT Founder, Shannon Illingworth, wrote about AVTâ€™s $100 million dollar lawsuit against Randall Lane. The lawsuit was filed on June 30, 2010 in California Superior Court, County of Orange.
The lawsuit was filed by AVT in response to libelous and false claims made by Lane in his book and in his web column. The lawsuit also names The Penguin Group â€“ publisher of Laneâ€™s book, and RTST, Inc â€“ an internet publishing house where Lane is Editor-at-Large.
In his letter to shareholders, Illingworth wrote: â€œMr. Lane recently wrote and published in his book specific allegations against Lenny Dykstra, former major league professional baseball player. Among the allegations and statements Lane wrote concerning Mr. Dykstra, was that he (Dykstra) was given thousands of dollars worth of AVT stock as payment for his efforts to promote AVT.â€
The letter further states that these allegations about AVT were completely false and damaging to AVT.
Illingworth stated categorically, â€œAt no time ever has AVT engaged in stock or money transfer to Lenny Dykstra for the purpose of promoting AVT public stock.â€
The lawsuit states that the Laneâ€™s story and book â€œIncluded false statements, (and) was degrading to the plantiff,â€ and that the defendants â€œActed in reckless disregard for the truth.â€
Illingworth also noted that AVT is solid and secure, with production and stability that are as strong as ever. He stated, â€œWe are continuing to build our business and further solidify our position as the technological leader in our industry.â€
ABOUT AVT: AVT, Inc. is a vending solutions provider based in Corona, California that has developed several significant vending machine technologies that yield a more efficient and reliable, yet technically advanced system. This advanced technology provides methods for cashless payment, credit card and debit card use, dynamic advertising, remote tracking, and inventory management. AVT has a strong balance sheet and currently serves more than 300 government and commercial vending accounts.
For more information, visit AVTâ€™s Website at: http://www.avtinconline.com, or call James Winsor, Chief Executive Officer and Chief Engineering Officer, at 951-737-1057.
Forward Looking Statements: This press release contains certain “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. These statements, as well as the phrases “strong”, “secure”, “leader”, “advanced”, “efficient”, “stability”, “significant”, “continuing”, “build”, and similar expressions, are generally intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of AVT, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Please refer to the documents that AVT has filed with the U.S. Securities and Exchange Commission, including AVTâ€™s most recent quarterly report, for details on financial condition.
All forward-looking statements in this press release are based on information available to AVT as of the date hereof. All written or oral forward-looking statements attributable to AVT or any person acting on behalf of AVT are expressly qualified in their entirety by the foregoing. AVT does not undertake any obligation to update or revise any forward-looking statement contained herein to reflect any change in AVTâ€™s expectation with regard thereto or any change in events, conditions or circumstances on which any such statement is based.