2. Describe how each principle could be abused to make unethical pitches to potential investors. For over 13 years, entrepreneur Tyrone M. Clark operated “Annuity University.” This two-day workshop trained over 7,000 people to sell annuities to senior citizens. In late 2002, the state of Massachusetts slapped Clark with a cease-and-desist order, accusing his firm of tricking seniors into trading in their investments for expensive and complicated annuity policies.

According to The Wall Street Journal, here are some of the practices Clark advocated:

● Oversimplifying the nature of the investments being sold. Clark says it, “You’ll waste time if you think you can impress them with charts, graphs, printouts or use sophisticated words.”

Instead, he recommends, “Tell them it’s like a CD—it’s safe, it’s guaranteed.”

● Using fear appeals. “[Seniors] thrive on fear, anger, and greed,” says Clark. “Show them their finances are all screwed up so that they think,

‘Oh, no, I’ve done it all wrong.’”

● Enticing retirees to attend sales seminars by offering free meals.

● Learning about investors’ concerns. At seminars, seniors note their concerns from a list of topics including taxes, Social Security, insurance, and protection of assets. Salespeople are encouraged to refer to these concerns when they call customers to set up a sales appointment.

CRITICAL ANALYSIS: Many of the strategies listed above are based on the kind of audience analysis described in this chapter. To understand their implications, consider the following questions: