Our Approach to Cease and Desist Letters

First, they ignore you, then they laugh at you, then they fight you, then you win. Whoever said that was wrong. If you do the right thing, you don’t always win. We learned that through experience.

Nanalyze started out as a popular forum to discuss tech stocks. As it grew in popularity, many cheerleaders came around to tout penny stocks. Over time, we discovered how pump and dump scams operate. We learned that some management teams aren’t acting in a malicious manner by issuing shares left and right. But regardless of their intent, over the counter (OTC) stocks almost always fail. We’ve lost track of how many we’ve seen crash and burn over the years.

In observing the penny stock scene, what became most infuriating was seeing who was being fleeced. Your average person buying a penny stock isn’t dumb. They’re typically older people who can’t afford to lose money but are trying to fill a gap – where their savings are today, and where they need to be when they retire. For a society that claims to be so interested in helping the disenfranchised, the Americans allow their elderly to get duped in a plethora of ways. So, we started to write about these companies.

Lifting up the Kimono

People who are making easy money don’t like anyone interfering with that. This is why the mafia makes examples of those who don’t comply. (And yes, the mafia has been behind some pump and dump scams.) Like the mafia, it’s very uncommon for the carrot to be offered, though that has happened. (A company once asked us if we’d pull a piece in exchange for shares. We didn’t.) More typically the response is an angry letter from a company executive who immediately shows their cards. We’ve spoken to many company executives who – even in the face of a very critical piece of commentary – will stick to discussing the facts. The discussion always stays at a professional level and surrounds what is factual, and what is not. When a company executive writes a page-long letter berating your article, it’s usually because you’re speaking the truth.

When we publish an article, we stand behind what we say. Our articles are always factual and insightful. If we make a mistake, we’ll admit to it and correct it. When a company cannot come up with any points of contention to argue, they’ll often play the “cease and desist” card.

Playing The Cease and Desist Card

A cease and desist letter is an intimidation tactic used by law firms to get someone to do something. In our world, such letters will always be demanding that we remove an article or be taken to court. When the law firm cannot find any inaccuracies to point to, they’ll waffle on about how much reputational damage is being incurred and accuse us of acting in a malicious manner.

We’ve now published nearly 2,000 articles. Of those, we’ve only removed four. One we agreed not to discuss publicly, so we will honor that. One involved a penny stock whose CEO and Founder was an experienced trial attorney. After some verbal sparring, we realized his attorney was free and ours was nonexistent. So, we pulled the piece. Another involved an attractive lady who solicits money from older investors who find the “fountain of youth thesis” quite compelling. You might say, “why does it matter what she looks like?” In this case, it mattered a lot. Her beauty managed to attract a large number of allies including a pro bono hotshot attorney who was also giving her some pro bono. Again, her attorney was free, and ours didn’t exist. The last case involved a company that was soliciting funds from investors around the globe and didn’t like it when we looked under their hood. This prompted us to have a good hard think about how we handle cease and desist letters going forward.

A cease and desist letter seems to be the ultimate proof that something is rotten in Denmark. Therefore, we can assume a few things. One, the party sending the cease and desist has lots of money or free legal help to propel something forward. Even if they don’t have a case, they can still waste a lot of our time. (We’d rather spend that time and money building products and producing content for our paying subscribers.) They often fund their efforts using the nice fat money tree they’re trying to protect. Two, these people have no integrity, so they’ll engage in whatever dirty tactics they can. They have no reputation to keep intact, and plenty of law firms will eagerly step in to share the loot.

In the last case, it was obvious the law firm had no ground to stand on. They could barely find anything in the article to quote. So, we removed the article and put that letter in its place.

In addressing this latest complaint, we realized the need to come up with a policy for how we handle cease and desist letters. As we often do, we’re killing two birds with one stone by publishing an article that describes our policy.

Our Cease and Desist Policy

We’ve now reached a point in our growth where we shouldn’t just kowtow to some stuffy Bahstun law firm that pens prose resembling a Shakespeare sonnet. Our network allows us to engage with some extremely competent legal resources and we will use them to defend ourselves if we believe a cease and desist letter has no merit.

In the past, we communicated with law firms “off the record,” but will do so no more. Whatever hostile communication we receive will immediately be published for everyone to see, as will our responses. Our initial response will always be to demand what factual inaccuracies have been made so we can correct them. We will not be intimidated by colorful language. Whatever is factually inaccurate we will willingly change, but we cannot do so without knowing what that is. If you cannot present anything that is factually inaccurate, then there’s nothing more to say. Our legal team will craft a response letter and we’ll leave it at that.

Doing Good by Doing Good

There’s a bigger question that needs to be answered in all this. What obligation do we have to warn investors about pitfalls in the investing world? None, but it’s a very good way to build trust. If you save someone from losing money, you’ve already proved your value. You now have what Andreesen calls “a true fan” who will likely open their wallet down the road when they realize you have their best interests in mind. We always have our readers’ best interests in mind which is why they’re signing up to Nanalyze Premium left and right.

Our approach to investing in tech stocks has unearthed loads of penny stock failures and other dubious “investments” such as ICOs, NFTs, and crowdfunding in general. But red flags also help you avoid losing money with bigger names as well. Zymergen, Ali Baba, and Nanox are a few good examples of why the red flag approach works so well.

Conclusion

Everyone’s got A Little Known 5G Stock That’s About to Blow, but a surprisingly small number of pundits tell people what not to invest in. We’ve stepped in to fill that information gap. If we see something investors are clamoring over that doesn’t smell right, that’s our opportunity to show why our red flag approach works so well. Countless people have thanked us over the years for the work we do exposing dubious investments, and we don’t plan to stop anytime soon.

Tech investing is extremely risky. Minimize your risk with our stock research, investment tools, and portfolios, and find out which tech stocks you should avoid. Become a Nanalyze Premium member and find out today!

2 thoughts on “Our Approach to Cease and Desist Letters
  1. This is one of the reasons I subscribed to your service. Very few OTC stocks are recommended. The vast majority of worthwhile stocks are on the NASDAQ or NYSE and even then some serious expertise is required to ferret out the good ones. That is why I rely on Nanalyse.

    1. We very much appreciate you saying that. Yes, even on major exchanges it takes a lot of research to ferret out the good companies. Your financial support helps us do that.

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