While the stock market has drifted aimlessly for the past 18 months, the growth of newsletters that offer investment advice has been almost straight up. Since 1970, the number of tip sheets devoted to picking everything from stocks to crops has doubled, to more than 700. That rapid growth has caught the eye of the Securities and Exchange Commission, which has been cracking down on fraud within the financial newsletter industry. The agency has hauled six market-advice publishers into court since 1981 on such charges as making false advertising claims and has launched administrative actions against a dozen more.
Now the...
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