By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
"If that's truly a lot of money for you, you need this!" he says. Go ahead, put it on your credit card. Don't think of it as a payment. Think of it as an investment.
It looks like about six people bought Wizetrade that day. Who knows how many will read the fine print: "All purchasers of software or other products owned by GlobalTec are encouraged to consult with a licensed representative of their choice regarding any particular investment or investment strategy."
And: "Trading stocks, options and spot currencies involves substantial risk; and there is always the potential for loss. Your trading results may vary. No representation is being made that any software or training will guarantee profits or not result in losses from trading."
And still: GlobalTec products are "analytical tools only and are not intended to replace individual research or licensed investment advice. Unique experiences and past performances do not guarantee future results! Testimonials are non-representative of all clients; certain accounts may have worse performance than that indicated."
No representation is being made? Then what the hell has Fred Mansfield been yelling about for the last two hours?
According to the Texas State Securities Board, GlobalTec founder George Thompson was never a licensed financial adviser or securities dealer.
Not much is known about Thompson before he met self-described Dallas philanthropist Marc Sparks around 2000. (See "Who Is Marc Sparks?") Sparks was in the midst of a class-action suit against his failed insurance group, Unistar Financial. Unistar would partially settle in 2001, paying about $1.7 million to investors who said Sparks and others artificially inflated the stock price. In 2003, the U.S. Securities and Exchange Commission filed its own suit against Sparks and Unistar.
According to the suit, still pending in the Northern District of Texas, Sparks created Unistar with Houston businessman Phillip H. Clayton (described as a "three-time felon") and a New Yorker named Dino Romano, "a securities fraud recidivist." Sparks, the suit says, issued misleading statements about Unistar's health, all the while buying and selling majority shares to shell companies owned by Clayton and Sparks in a series of unregistered transactions.
A spokeswoman for Sparks stated in an e-mail to the Press, "We are confident that there will be a satisfactory resolution."
Unistar went belly up in 1999, and Sparks needed something to do. According to his self-aggrandizing Web site, www.whoismarcsparks.com, Sparks is the kind of guy who sits around waiting to give money to entrepreneurs who invent the next big thing.
That's when Sparks, according to his Web site, "took on a brash, young partner who had developed a remarkable software program but had no idea how to get it out of his garage" and GlobalTec (originally called Stock Decision Software) was born.
Wizetrade practically sold itself. The software analyzed real-time stock-market data and showed users buy and sell pressure for every conceivable stock. And really, that's all you needed to know. It's called black-box trading -- you don't have to know anything about what the company does, how long it's been around or, for that matter, its freaking name. All you need to do is look at how many people have bought and sold the stock in the last five minutes or last five months. If you see a green light, buy the bastard. Red, sell. Boom. Level playing field. No need to give money to some snot-nosed 24-year-old broker in a fancy suit sitting in a fancy high-rise. All he cares about is his own commission anyway.
Although the "proprietary algorithm" behind Wizetrade may be complicated, the concept is not supposed to be. According to the Wizetrade Web site, the software's graphs "analyze the selected stock's market activity and indicate its upward and downward trend."
Those trends are color-coded. The red line "incorporates the algorithms and factors that have driven a price downward, representing the selling interest of the stock," while the green line "incorporates the algorithms and factors that have driven a stock's price upward, representing buying interest of the stock."
Then user then employs the "FAST" system:
Ffor fresh cross: "when the green line crosses over the red line within 1 time frame of the current time frame on the Wizetrade charts."
Afor angle: "When you want to take a long position in a stock, you want to see the green line pointing up between 2:00 o'clock and 12:00 o'clock on an imaginary clock face. The higher the angle of the Green Line, the stronger the buying trend."
S for separation: "When you want to take a long position in a stock, you want to see the red line pointing up between 3:00 o'clock and 12:00 o'clock on an imaginary clock face [sic]."
T for timing: Wizetrade suggests guidelines for whether you're a long- or short-term trader.
The concept was so easy that GlobalTec subsequently sold similar software for the foreign exchange (forex), commodities and options markets.
Understanding the genesis of the forex software is a bit tricky, since it involves the same product sold over and over again under a variety of names. It's almost as tricky as understanding the forex market itself, an especially risky arena where you buy and sell different currencies; yen for euros, dollars for drachmas.