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Dykstra Tells Creditors To Pile it On And They Oblige

Let’s re-visit one of the more salacious stories to hit the papers in the post-Bernie Madoff era. I’m talking about the story of Lenny ‘Nails’ Dykstra, the former all-star baseball player turned stock picker made by TheStreet.com’s Jim Cramer. Dykstra ran into a bit of trouble last year after the market turned down. The Wall Street tabloid Drealbreaker described it this way last summer:

Lenny Dykstra has officially filed for Chapter 11 bankruptcy. This wouldn’t be so tough to take if we could comfort ourselves by the idea of Nails returning home to his Thousand Oaks manse but, oh, right, the place is set to hit the auction block tomorrow. Right about now you could say we’re feeling a high level of rage and luckily, we know exactly where to direct it: Jim Cramer. This, we’re putting it out there, is all Jim Cramer’s fault. Not because he fired Lenny from his Street.com gig, “Nails by the Numbers,” in which Dykstra dispensed investment advice to subscribers, but for JC’s bold call made back in March 2008, when Cramer told Bob Costas, “Lenny Dykstra is one of the greats in this business,” which obviously put a curse on Len’s head, as did Cramer’s insistence on wearing a Nails jersey to bed every night. We’ve said it before and we’ll say it again: an on-air apology is in order, as is a year’s supply of dip, a simple pleasure which LD can no longer afford.

When we last visited our anti-hero, he was upbeat, sure he could beat this thing:

"F—— derelicts," Dykstra snaps about his growing list of hostile ex-business partners. "Where’s a real respected businessman in our society who’s suing me? We don’t see one, do we?"…

"I love it, baby," the 46-year-old told the Daily News from his lawyer’s California office. "Pile it on, bro."

Of course, the day-to-day of bankruptcy has changed things a good deal.

Now, the Daily Beast alleges that Dykstra copied all of his stock picks from another analyst, faked the data and then sold access to Jim Cramer. From the Daily Beast account you get the sense that Dykstra knew nothing about stocks and investing. He was just another guy cashing in on his celebrity and running up debts to live large in the asset-based economy.

Dysktra’s success – like so much in the bubble economy  – was, in a word, a fraud.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.