This relationship remained largely undisclosed until the last time he appeared on Nightly Businses Report with Paul Kangas. While probably not illegal at that time, many believed it was unethical.
It was during Bob Brinker's last appearance on the Nightly Business Report that Paul Kangas asked Brinker about a possible conflict of interest that Brinker had in UTEK. Brinker denied that there was a conflict of interest, but did not deny that there was a fee-based relationship. Here are some excerpts of the dialogue from the July 23, 1999 program:
KANGAS: We just have a minute left. You also said at that time to by Ultratech Stepper (NASDAQ:UTEK) at 29. Now, it's down to about 15. What do you do with that?
BRINKER: Ultratech's been through a difficult period. They have strong financials, close to $10 in tangible book value, mostly in cash. A new product effort under way, and they have a new technology, bump processing for advanced semiconductor manufacture. This is an important technology going forward for high performance low cost chips. So we have a "hold" on that stock.
KANGAS: Bob, it's come to my attention that employees at Ultratech have the option to invest their 401 (k) funds with a management firm in which you are a principal.
KANGAS: So, my question is does your firm recommend individual stocks?
BRINKER: Absolutely not. The BJ Group exclusively invests in no-load mutual funds.
KANGAS: All right. So, you see no conflict there?
BRINKER: Absolutely not."
Kirk Lindstrom wrote:
"I always get a chuckle out of that reply.Now it's possible that the BJ Group may have waived the wrap fee for the employees. Most employees don't pay a wrap fee to own mutual funds in a 401k. What about that? Will L. explained why that just adds to the smell.
Brinker just recommended a specific, unheard of stock on Kangas’s National TV Show. Paul Kangas asks and Brinker answers that the firm with his name on it is paid by UTEK but the firm, with Brinker’s name on it, doesn’t recommend individual stocks.
I always wondered why Paul Kangas didn’t reply “But you just gave a recommendation for an individual stock that you admit is paying you a fee. How can you say your firm doesn’t recommend individual stocks? Isn’t a principal and employee the same thing?”
Will L. wrote:
"That is why the UTEK deal smells doesn't it? Why would a company that cares about their employees hire a wrap fund outfit when they could get nearly any mutual fund outfit or large brokerage to do their 401s?
Well if the executives that make the decision for these employees are holding tons of stock in a company that is going nowhere while other tech companies are skyrocketing had a choice of picking a radio host who touts a few stocks-- that might sway one's thinking. Can you think of a better reason a company would seek out a wrap fund who's advertising was geared toward the individual investor?
What we know when we cut through your duplicity and hubris to keep people from seeing the nature of the UTEK-Brinker relationship is that BRINKER was getting PAID after being selected by UTEK for a relationship that he NEVER DISCLOSED while he had UTEK as his ONLY BUY and touted it in the media, in his newsletter and under his alias on the internet.
So the issue is that what Brinker was doing was NOT ethical. His subscribers/listeners should have been told that UTEK was paying Brinker when he touted the stock to them. Brinker should never have used an alias on the internet to tout the stock to potential investors after having lured them to investigate the UTEK threads by his comments on the stock in the newsletter and on the media. That is beneath contempt."
To the following statement, "You've never proven that Brinker did anything unethical regarding UTEK." Will L. answered:
"I never "proved" that the sun will rise in the east in the morning. I never "proved" that OJ killed two people. A jury acquitted them. It is still obvious to any reasonable person that he did it and it was wrong.
Brinker had one stock as a buy during much of the period from 97 through 99. That stock was Utek. He touted that stock under an alias on Silicon investor and on this very thread. He touted that stock in the newsletter as his ONLY BUY. He raved about it on the radio.
What Brinker NEVER DISCLOSED was that out of the universe of 6,000 stocks the ONLY stock he found to be a buy was ALSO PAYING HIM.
Now if you are saying that I cannot fathom the synapses of Brinker's brain, of course you are correct. If your premise is that he was so naive as to believe that touting a stock with scores of posts under his alias that you have admitted was Brinker himself and never disclosing the company was paying him, then of course like the OJ jury you have an agenda.
If your premise is that Brinker was so naive that having the stock as his ONLY individual stock buy during the greatest tech rally in history without disclosing that UTEK was paying him...then of course like the OJ jury you have an agenda.
If you need me to show you a video tape of OJ stabbing the cowboy "$%%@#" out of those two people I can't do it. You know, I know and any thinking person knows what he did was wrong. His behavior after the fact testifies to the truth.
Brinker, under his alias was evasive, and he was evasive on his last appearance on PBS when someone else called him on his apparent conflict of interest.
Now you may not want to know if the advisor you trust is being paid by the company who is the ONLY stock he is recommending. I think any thinking person outside of those with an agenda ala OJ jury or a Brinkershill like you would like to know that.
Brinker knows it was wrong and of course so do you. He hides it---you won't admit it. The thing that separates Brinker, and makes his UTEK scam worse than Grubman, was that at least Grubman had many stocks as a recommendation during that period in which he was also touting stocks that paid him.
I don't have Brinker's emails. I don't have the minutes of the meetings of UTEK. I don't have a video tape of the murder scene in the OJ trial. I know the difference between right and wrong and what Brinker did with his alias Don Lane touting UTEK and LYING in many cases about it--was WRONG."
Brinker was so sensitive about the UTEK subject, he tried to censor questions on Kirk Lindstrom's former discussion forum. Kirk wrote this first person account:
"We started the first FREE (didn’t have to pay SI or AOL) discussion forum at Suite101 in 1997. Brinker liked it so much he gave a link to our forum no his site. In 1998 Brinker told me to delete a question someone asked about his relationship with UTEK. I refused and suggested he answer the question to end the controversy. Brinker removed all links to our site from his site and strange aliases showed up here and on Brinker’s forum to attack us and our credibility.Brinker kicked people off his discussion forum who had bad things to say about his market timing record Rande Spiegelman was kicked off Brinker’s site and Brinker cancelled our Marketimer subscriptions in January 2000 and returned our money. ....."
Here are two samples (out of dozens) that Bob Brinker posted anonymously as "mistertopes" touting UTEK and ridiculing anyone who shorted the stock:
To:Justa Werkenstiff who wrote (1369)
From: mister topes
Wednesday, Sep 17, 1997 9:17 PM
Maybe Mr. UTEK shortseller will need one of Kulicke & Soffa's
new state of the art ball bonders next week when UTEK
appears at the annual Montgomery technology conference.
Seems to me Mr. shortseller's shorts could benefit from
a KLIC ball bonder once investors start to realize what
this company is planning to do in the future. But maybe
the shortseller needs a tax loss and is planning to cover
at 40 for a cool 40% loss on the shares sold short in the
mid twenties in September. Now the shortseller must face
the start reality that the 28-30 area is the new support
zone for UTEK and the stock is destined to gain weight
in the thirties. And wait 'til the analyst upgrades!
Good grief, I am sure glad I was buying since the teens
and not shorting! Shorting UTEK is for fools.
To:Ian Stromberg who wrote (1384)
From: mister topes
Thursday, Sep 18, 1997 8:03 PM
Don't stop thinkin' about tomorrow. That is the wise counsel of
Fleetwood Mac and very good advice for the UTEK shortsellers.
If you are short and wonder how you got screwed so very badly,
here is what happened. First we all had a long winded copyright
discussion on this thread while the shortsellers had a field day
shorting UTEK in the mid twenties. Then, after all the shorts
were in place, we started talking fundamentals. E-beam technology
that will prove the worst nightmare ever for ETEC, and P-Gild
technology that will be bigger than the whole company is now by
2000, and pole trimming for backend MR applications ready to go.
And now UTEK will appear Thursday September 25 at 10:45 am Pacific
Time at the Montgomery Technology Conference in San Francisco to
bring all of the world up to date. Are you lonesome tonight Mr. Short?
Brinker never again made an appearance on Nightly Business Report. Jeffchristy had an opportunity to ask Paul Kangas why. Jeffchristy wrote:
Discussion: Bob Brinker Free Discussion Site 59,820+
Date: May 30, 2005 5:41 PM
Subject: Bob Brinker and The Nightly Business Report
"I suspect many of you have wondered why Bob Brinker has not appeared on The Nightly Business Report as a guest market monitor since 1999. I attended an event sponsored by my brokerage company last week that was hosted by Paul Kangas. I was fortunate to get a chance to talk to him for a few minutes prior to the start of the event.. He said that he would like to have Brinker on but that Bob had declined several invitations to appear. He said he didn't know why.So draw your own conclusions as to Brinker's ethics. UTEK is just one of several things that have disappeared so quickly and completely that the Great Houdini would look inept by comparison. 8)
I told him I had several thoughts about it, I said that I knew one of the viewers whose question he used in Brinkers last appearance and their was a question about a potential conflict of interest with Brinker and his relationship to the UTEK employee pension fund. I told him that Brinker took 60% out of the market in January 2000 and then he recommended putting up to half of it into the QQQ in November of the same year. The next day I thought of several other things that I wish I had said. I sent a E-mail to another executive at the NBR since I didn't have Paul Kangas's address. This evening he responded that he forwarded it to Mr. Kangas. I suggested he consider having David Korn on if Brinker doesn't want to appear."