EVIDENCE Wall Street LOATHES You | Episode 138

Contempt, Whistleblowers and Wall Street.  Today you learn just how far the scumbags on Wall Street will go to line their own pockets at your expense, and it's DISGUSTING.  Get ready for more evidence that the men and women of "BIG FINANCE" absolutely loathe you.  I'm Bryan Ellis.  This is Episode 138.

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Hello, SDI Nation.  Welcome to the podcast of record for savvy, self-directed investors like you!

Today, you hear a story that's disgusting, but very illustrative.  I hope you'll not just take this story as an anecdote, but as a motivator to action.  Because my friends, though this story is about the contempt that drives one single person, if he gets what he wants, it will have a very direct and very negatve impact on millions of people-quite certainly including many, many listeners to this show.

Today's story is one of contempt and greed.  Allow me to set the stage.

Back in 2006, Congress authorized the creation of a Whistleblower Office within the IRS.  The idea was simple - to motivate people to identify others thought to be engaged in tax fraud, with the motivation of receiving a percentage of the taxes collected as a result.  Yep, a formal "snitching" program.  Classy, huh?  But the IRS was really only after the "big fish", because the reward only applies if there's potential for collecting more than $2,000,000.

And, like everything else the government does, this program is wildly inefficient.  For example, in 2012, 8,634 people snitched on their employers, their competitors, their neighbors and their friends.  How many of those cases resulted in collecting $2,000,000 or more?  12.  Yep, 12.  Not even 1% of the cases reported by snitches resulted in achieving the ojective of the program.  Barely 1% of 1%, actually.

Yes, the IRS Whistleblower program connects to Wall Street's loathing for you.  Hang with me.

Another piece of this tale is the mutual fund company Vanguard.  This is where the story will connect to many of you, my dear listeners.

Vanguard is a very highly reputable mutual fund company that has achieved some impressive operational efficiencies.  As a result, the fees they charge clients of their mutual funds are far less than their competitors.  In fact, their average expense ratio is, depending on whose stats you're looking at, somewhere between 60 and 85% less than the industry average.  And despite this, their mutual funds are competitive in terms of returns.

As a result, Vanguard has become a very large company and is a favorite of individual investors who want to keep their expenses low.

So what's the problem?

A guy named David Danon used to work for Vanguard.  Danon is a lawyer.  And Danon chose to use the information to which he had access while acting as a lawyer for Vanguard to report them to the IRS for underpayment of taxes.

I want that to sink in for just a moment.  Let's set aside, for a moment, whether Vanguard actually underpaid taxes.  I want you to focus on the fact that Danon, an attorney for Vanguard who continued to work for them while he was preparing this Whistelblower claim, an attorney who is bound by attorney-client confidentiality, nevertheless reported his client to the IRS... not out of the goodness of his heart, but because he expects to be paid a percentage of the revenue the IRS may attempt to collect.

That, my friends, is disgusting.

But why does Danon allege an underpayment of taxes?  This gets to the point of contempt for YOU.  As in all lawsuits, the devil is in the details, but in this one specifically, the general idea is this:  Danon alleges that because Vanguard charges lower fees to it's clients than it's competitors, that it therefore made less profit than it should.  And therefore, Danon suggests, Vanguard should be taxed on the fees it SHOULD HAVE charged.

That's right, folks, Vanguard is being accused of being a tax cheat essentially because they could have made more profit than they actually did.  They didn't rip you off like all of their competitors, and this guy Danon - a Wall Street guy - wants them to pay for it.

And, if he wins in this effort, Vanguard will pay... but more importantly, YOU will pay.

The bottom line:  This guy Danon, a Wall Street insider to be sure, is doing just the same as his industry does:  Putting his own interests far ahead of that of clients like YOU.

This isn't a small deal.  My reading of this situation suggests that there's a tax bill of nearly $35 BILLION at stake for Vanguard, should they lose.  And who will pay that?  You.  Not just You if you're a Vanguard customer.  You if you're invested in Wall Street at all.  Because after Vanguard's low pricing model goes, there will be no real competitive restraint to even higher fees.

At the end of the day, the real issue is confiscatory taxation that’s weaponized against taxpayers in the form of a Whistleblower program that is proven to be astoundingly inefficient.  But you can’t do much about that, other than by voting for politicians who believe, correctly, that taxes are far too high.

But what you CAN do – what you SHOULD do – is to stop merely CONSIDERING shifting your assets out of the stock market and into an asset class that actually MAKES SENSE.  You need to actually TAKE ACTION!

To that end, I’ve got some great news.  In the coming week, I’ll have a lot more to share with you about some TRULY worthwhile assets… some very attractive cash flowing rental properties that you can purchase in strong markets, with guaranteed rental income, built-in property management and at below-retail pricing!  We’re at an advanced stage in working to acquire a great portfolio of cash-flow producing rental property, and I’ve got to tell you… this one is exciting.  If you’re considering the purchase of rental property in the near future – or particularly if you’re seriously considering another property right this moment – I respectfully suggest you consider waiting until next week when you hear what I have to share with you.  You’ll be very, very glad you did.

I’ll announce more about that on this show when the details are confirmed, but as always, the best way to make sure you get the most timely notice of great opportunities is to be on my TOP PICKS notification list.  To get on that list, at no cost, just text the word TOPPICKS with no spaces to 33444.  Again, text the word TOPPICKS to 33444.  It’s spelled TOPPICKS with no spaces.

Well, my friends, I’m off to spend a day with daughter at a college interview she’s been invited to attend.  I hope you have a great weekend, and be sure to join me on Monday because on that day, I’m going to tell you about that magical world of hedge funds and private placements that have always been the exclusive domain of the very wealthy… and I’ll show you how YOU can get access to that world, as well… even if you’re not exactly Bill Gates.  But the only way to get it for sure is to SUBSCRIBE to this show on iTunes or Stitcher, so be sure to do that right now!

In the mean time, folks:  Invest wisely today, and live well forever!

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