When a Seattle-based radio investment adviser vanished briefly in December, he stole something precious, yet intangible.
By disappearing, and allegedly leaving a note in which he confessed to being a thief and an embezzler, Michael T. Martin took another little piece of credibility away from an already-tarnished genre of talk radio: the financial advice show.
“The thing in Seattle–it hurts me,” said Adriane G. Berg, the respected host of Wealth Builder, a nationally syndicated financial advice show that airs locally on WKRS-AM 1220 in Waukegan. “How long will it be before a program director says, `I can’t take a chance on a financial show’?”
Indeed, the animal known as financial talk radio is not a thriving one for a number of reasons, not the least of which is a proliferation of competing finance-information products–everything from on-line and printed newsletters to new magazines to all-business-news radio networks and cable television channels.
But scandal may be the most significant stunting factor.
Financial talk radio “is not growing,” said Michael Harrison, editor of Talkers magazine, a talk-radio trade publication based in Springfield, Mass. “There have been some terrible, terrible disasters that have given the industry a black eye.”
Financial talk radio “runs the spectrum from some of the most shady and unfortunate programs and hosts in talk radio to some of the most respectable,” he said. “It should never be taken too seriously in terms of the personal finances of a listener but rather as broad strokes . . . the basics.”
That said, the fact remains that many Americans do take it seriously, particularly because many must now direct their own retirement-savings plans. Many listeners get valuable advice, but others have lost their life savings.
Sorting the class acts from the crass acts is no easy task, particularly because the field comprises only a few national players and many, many local, weekend advisers. And no one is really minding the store.
Law-enforcement agencies generally intervene only when they receive complaints or hear about something suspicious through media accounts. By then, gullible investors often have been burned.
“The industry has got to, it must, police itself better,” said Bob Newman, a columnist for Talkers magazine and a publicist who books talent on talk shows.
“I don’t believe there is any oversight now except for conservative general managers who try to put controls on their stations,” he said.
Clearly, that hasn’t been enough. Recent scandals and investigations paint an unflattering picture.
Seattle-based host Martin, whose show aired on 39 stations and the Armed Forces Radio Network, surrendered to the FBI on Dec. 14 and faces a criminal complaint of fraud by radio.
Authorities allege he solicited money from listeners on the pretext that he was setting up an offshore mutual fund. “There is no evidence that such a fund was set up,” said Janet Freeman, assistant U.S. attorney for western Washington.
One investor appears to be out $50,000, but investigators believe the total amount lost by investors will “substantially exceed” that amount, she said.
Still, this pales next to the $21 million fraud schemes spearheaded by Irwin H. “Sonny” Bloch, the author of six personal-finance books whose radio show may have reached as many as 1.5 million listeners in more than 200 U.S. cities.
Bloch, who admitted persuading listeners to invest in ventures he knew were worthless, was released from prison in New York in September after less than a year behind bars, pending sentencing on charges in New Jersey.
While most of the other defendants in the New Jersey case were sentenced in December, the judge postponed Bloch’s sentencing, noting he has terminal lung cancer.
Also making news in the past year–for remarkable chutzpah–was Joshua Fry, a former radio host in the Washington, D.C., area who is serving an eight-year sentence for securities fraud and theft in schemes that bilked 130 investors out of $4.7 million.
Not to be stopped by mere incarceration, he attempted to sell investment advice to Internet surfers before law-enforcement officials objected early last year. His on-line market updates ceased June 26.
The suspicion of scandal even wafted briefly over homey radio talk-show husband-and-wife co-hosts Ken and Daria Dolan, who bill themselves as “America’s First Family of Finance” and who also appear two mornings a week on CBS’ “This Morning” television show.
Early last year, the Massachusetts secretary of state’s office investigated an allegation that a Dolans radio listener was steered to Ken Dolan’s brother, Paul, a former stockbroker who has pleaded guilty to stealing about $2 million from at least 30 clients.
“We didn’t find sufficient evidence to file a complaint,” said Jack McCarthy, a spokesman for the office.
Ken and Daria Dolan, whose call-in personal finance show airs on WJOL-AM 1340 in Joliet, did not respond to requests for an interview.
The show’s producer, Scott Lakefield, declined to comment on the probe, except to say, “There was no association between the two (brothers).”
The Dolans are among a handful of respected nationwide players in financial talk radio, part of a varied field that includes consumer advocate Bruce Williams, airing on WBIG-AM 1280 in Aurora and WRMN-AM 1410 in Elgin, and investment guru Bob Brinker, airing on WLS-AM 890 in Chicago.
Rounding out the national picture are such financial advisers as Adriane Berg, Jim Jorgensen and Dave Ramsey, who are syndicated but reach fewer markets. Jorgensen’s show debuts Sunday on WMVP-AM 1000 in Chicago, while Nashville-based Ramsey is not on in this market.
Beyond that, it’s the little guys–the local financial advisers who take on weekend radio gigs, and these shows can run the gamut from the staid to the bizarre.
Among those at the offbeat end is “Capitalist Pig,” a Saturday afternoon show on WMVP-AM 1000 hosted by Northwestern University senior Jonathan Hoenig. Recent features: financial advice for a local stripper and discussion of the rising fortunes of a beef jerky maker.
Overall, financial talk radio is just a small slice of the talk-radio industry, noted Robert Unmacht, publisher of M Street Journal, a Nashville-based weekly publication on the radio industry.
While the bigger names may reach 200 stations or so, this is small potatoes compared with political talk-show host Rush Limbaugh, who is syndicated on about 600.
“Mostly it’s the specialty stuff on the weekends, just like the polka hours and swap shops–it’s not big time,” he said.
Still, such shows are lucrative for stations, he said, because they attract advertisers who want to reach a financially oriented audience.
“It’s a very easy concept to sell,” he said.
What is much harder, experts say, is for listeners to differentiate the objective shows from the infomercials, or shows where hosts pay for air time as a way to boost their products or services.
If all the commercial spots are for one product, beware. And if the spots urge immediate action, tune it out, said Newman, the columnist at Talkers magazine.
“The ones to worry about are the futures and options guys on the radio . . . the `buy today, lock in the price’ spots,” he said.
Beware, as well, of softball interviews with chief executives of firms you’ve never heard of, particularly when such interviews are followed with phone numbers you can call for more information, said George Harmon, who teaches business journalism at Northwestern University.
An unethical radio host with a stake in a lightly traded stock may be trying to push up the stock’s price in order to sell his holdings for a tidy profit.
“I just think it’s `buyer beware’–anything you hear on the airwaves,” Harmon said. “People ought to have a reputable broker or brokerage house to do their research, or they should do it on their own by going to the library.”
