From Time Inc. to a Ponzi scheme: The journey of Jordan Goodman.
Spin your radio dial, download a podcast or sit down at your next corporate gathering and you’ll have no trouble finding a self-styled financial guru to tell you what to do with your money.
What you may not know: Financial experts, even those with bulletproof credentials, may be trying to sell you something.
When David and Patricia Toshner of Fond du Lac, Wis., first heard Jordan Goodman discussing the Woodbridge Group of Companies on the radio, they didn’t know that he might also be a sales agent. They just trusted the man who called himself “America’s Money Answers Man.”
After all, Mr. Goodman was an 18-year veteran of Money magazine and the author of books with his smiling face on the cover. The radio station where they got their news pumped his honking, Rhode Island-accented voice into their home, promising 6 percent interest plus their cash back.
The Toshners put $510,000, much of it from an on-the-job accident settlement, into Woodbridge. For a few years, the checks arrived regularly, just as Mr. Goodman said they would.
But just over a year ago, the checks stopped. Soon after, the Securities and Exchange Commission declared that Woodbridge, which Mr. Goodman had described with glowing confidence, was a billion-dollar Ponzi scheme with thousands of victims.
And when Mr. Goodman was discussing Woodbridge on the radio, he was not merely dispensing financial advice, the commission said. He was one of the scheme’s leading sales agents, earning more than $2 million by steering investors into it. The S. E. C. said Mr. Goodman “in many instances misled investors to think he was not being paid transaction-based sales commissions.”
Mr. Goodman, 64, agreed in December to pay back what he had earned, plus more than $315,000 in interest and a $100,000 fine. He also accepted a lifetime ban from the securities industry, while neither admitting nor denying the S. E. C.’s charges.
His agreement with regulators carries a standard prohibition against declaring his innocence, and he declined to comment, on the advice of his lawyer. Before signing the agreement, he had said publicly that he had no idea that Woodbridge was not operating as it said it would when he was promoting it.
But a close examination of Mr. Goodman’s decades of work as a money guru reveals the many angles he worked. He made his living not just with books and speaking gigs, but as a paid ambassador for companies offering financial services.
The companies Mr. Goodman endorsed were a motley assortment, strange bedfellows for a man who made his bones at one of the country’s most respected financial publications. He had financial relationships with companies that promise to settle your debts for pennies on the dollar and allow you to borrow money using fine art and luxury handbags as collateral. And he dabbled in lending to borrowers via high-interest payday loans, then earned some more by channeling those who could be saved into nonprofit credit counseling.
These arrangements often made Mr. Goodman what is known as an affiliate, which enabled him to earn a commission for each new customer he helped those companies land. At other times, he took a flat fee to offer his endorsement.
Relationships like these are not illegal: Similar arrangements can be at play when people click a link that directs them to an item for sale on Amazon. And these deals are surprisingly common in the financial guru world.
But Mr. Goodman was particularly aggressive in pushing the companies that paid him and sometimes withheld crucial information from his followers when discussing the companies during his media appearances — conduct that, in the case of Woodbridge, particularly rankled the S. E. C.
When I heard about Mr. Goodman’s case, I took inventory of my memory. I had met him twice at conferences and appeared on his radio show in 2017 to promote a book I had written.
Nothing about him seemed out of sorts. Like most of us in the small world of personal finance, he seemed to be trying to help people and hustling hard to figure out a way to make a living at it.
But as I started looking into how he had gotten so many innocent people into this mess, it became clear that while the ending of his story was laid out in the S. E. C. charges, the beginning and middle were more muddled.
In the world of money experts who write or talk, where recurring subscription revenue is hard to come by and it’s hard to make money through old-fashioned advertising, there is no sin in pursuing alternative business models. Still, we all owe our readers and listeners a thorough explanation of how we and our employers make money.
So let me begin here: The New York Times owns Wirecutter, which earns fees when people read the site’s best-of reviews and click embedded links to make purchases. I am an unpaid member of the advisory board of Wirecutter Money, which publishes guides to picking the best credit cards and plans to publish more personal finance content as the site grows.
Wirecutter discloses and explains its affiliate relationships in many places on its site, and there are many differences between what I do for Wirecutter and what Mr. Goodman did.
So how much did people in Mr. Goodman’s audience know about how he made money? And what are the lines that public-facing money experts should never cross?
When Mr. Goodman arrived at Money in 1979, the magazine’s parent company, Time Inc., was a dominant force in publishing, a temple of fact-checking rigor and high editorial standards. Money alumni who worked alongside Mr. Goodman at various points include the CNBC anchor Tyler Mathisen and Eric Schurenberg, who eventually edited the magazine.
Mr. Goodman was at Money for the better part of two decades and wrote about all aspects of investing, including fraud. In 1993, he wrote about a guru in trouble: A jury in Iowa had found Charles J. Givens Jr., an author of many books with his face on the cover, guilty of making fraudulent misrepresentations that caused a young widow to lose out on a large life insurance payout.
