So, not only was Dykstra's supposed success in picking stocks a complete sham, but today it comes out that he secretly accepted $250,000 worth of shares in exchange for pimping an obscure stock. How is this man not in jail yet?
When Dykstra was a golden boy at TheStreet.com, a curious recommendation showed up. He heavily promoted AVT, a little-known penny stock, claiming it was going to explode and make everyone rich. And who could be faulted for disbelieving him? At one point, Dykstra's picks were 99 winners to only one loser.
Of course, now we know how he fudged the numbers. (A stock can't technically be a loss until you sell it.) And now, according to one of Dykstra's top advisers at the time, we know why he pushed AVT so hard.
According to Richard O'Connor, Dykstra accepted $250,000 worth of stock in AVT in exchange for putting it in his newsletter.
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.
Additionally, he promised the founder of AVT that he would give her access to Jim Cramer, the biggest name in populist finance. According to O'Connor, that was one of a number of small company CEOs offering cash and stock to Dykstra in exchange for his influence with Cramer.
It's easy to blame Cramer for unleashing Dykstra upon the world without first doing his homework. And it's easy to blame HBO's Real Sports for swallowing the story, hook line and sinker. But it's easy to forget how things worked in that time of irrational exuberance: we listened to what we were told, because these people were making money. Everyone was making money. Hell, even yours truly applied for a highly coveted job at Dykstra's ill-fated Players Club magazine.
So, let's not fault anyone for buying what Dykstra was selling. Let's fault Dykstra for being a huge scumbag, a liar, a con artist, and now, a fraud worthy of an SEC investigation.
Jim Cramer Stock Touting Scandal [The Daily Beast]