How to Smell a Rat

The Penny-Stock Scam King

From the 1930s to the 1950s, Walter Tellier reigned as the consummate con man. He lived in style in wealthy Englewood, New Jersey. He belonged to the prestigious Westchester Country Club. His fancy cocktail parties were annual hits at North American Securities Administrators’ conventions. Tellier always came across as the paragon of respectability. In truth, he was a cheap swindler who bilked thousands of investors. During the 1950s bull market, Tellier made a fortune selling naïve investors worthless “penny stocks” at ridiculously low prices, from 15 cents to 50 cents a share. Tellier used “boiler rooms” – ugly lofts manned by criminals and college kids to tout his phony stocks over the telephone.

“Entry-level swindlers” known as “coxeys” phoned suckers whose names Tellier collected from direct mail lists. Claiming to be calling “from Wall Street,” the coxeys made outlandish claims about the can’t-miss value of Tellier’s penny stocks. Often, victims forked over $50 to $100 each to buy the specious stocks. Next, the “loaders” or “dynamiters,” slang terms for more experienced swindlers, would work the phones. These con men convincingly pushed...