Wesley Clark is a former US Army Four Star General who managed the Kosovo war in the 1990s. He also appeared as a defense analysts on CNN and other news channels. Now a days his specialty is penny stocks. Yes penny stocks. Many investors don’t take penny stocks seriously. But this former US Army Four Star General takes penny stock companies seriously and lends his name to get legitimacy with the investors.
Clark is one of many former governors, generals, and congressmen who’ve found second careers lending their name to tiny companies that are willing to pay for prestige. Since he ran for president in 2004, Clark has joined the boards of at least 18 public companies, 10 of them penny-stock outfits, whose shares trade in the “over the counter” markets, a corner of Wall Street where fraud and manipulation are common.
All but one of the 10 lost value during Clark’s tenure. Three went bankrupt shortly after he left their boards, and the chief executive officer of one pleaded guilty to fraud. Only four of the 30,958 people in Bloomberg’s database of over-the-counter board members have served on more boards than Clark. “His appearance on a board is a huge red flag,” says Joe Spiegel, whose fund, Dalek Capital Management, made money shorting the stock of one of Clark’s ventures. “These companies use people’s names to get legitimacy.”
The lesson: don’t go after the names who are promoting a company. Do your own research and only then make the decision. This is what the professionals do. Amateurs get carried away with big names, rumors and recommendations by friends. Doing research is not difficult and can be easily done online now a days.