It’s time for Tim Sykes to take a hike
It was five years ago when Larry King interviewed Timothy Sykes (39). The experience was a dream come true for the penny stock guru. The 11-minute interview is interesting but not for reasons intended. It’s a textbook example of an American fraud at work and play. Luckily, Sykes doesn’t know any better because it wouldn’t be on his website for the world to enjoy if he did.
I haven’t spent money on anything produced by Tim Sykes, so I can’t say if his trading system is a scam. I do know I’ll never buy into it because I don’t trust him. He’s that guy you went to college with who was incapable of telling the truth. I find this behavior odd, given that he holds a degree in philosophy from Tulane University. There’s also a good chance his antics and showmanship are intentional, and he’s having fun making money from unsuspecting suckers who think they can get rich overnight.
In the King interview, you’ll notice Sykes is a fast talker. I couldn’t help but wonder if maybe he was on meth or blow. Someone should have told him to slow down. He offers conflicting versions of events he’d already shared in previous interviews when discussing personal stories.
Sykes is everywhere and inconsistent with sharing critical moments from his past. You can’t help but wonder how someone who is so blatantly full of shit could become so successful. The truth is, he isn’t, or at least not as successful as he would like for us to think. He’s a smoke-and-mirrors charlatan who’s convinced himself and his followers that he speaks the gospel and holds the keys to the money kingdom.
In the King interview, Sykes said he earned his money by short-selling penny stocks. “It sounds crazy,” he says. “You bet on stocks going lower. But if a company is fundamentally worthless when it’s out $1 or $2 a share, it drops 90%, and that’s how I make my money.”
“I look at historical statistics,” he also says, adding, “I say logically this company will fail.” I don’t understand this. How does one analyze historical statistics to determine if a company will succeed or fail? What exactly should we look for in a statistics report?
Sykes recalls the company Liquid Metal when they announced a deal with Apple and how their shares jumped from .12 to $2. “I made my 50% return in a few hours and was done with it. Since then, I’ve been shorting it a lot.”
King asks him if there has ever been a stock that has jumped from .50 to $100.
Sykes’ answer is an example of how to confuse your listeners. He shares a story about Sponge Tech, a company whose shares jumped from .003 to .30. in a few months. The first time you watch this, it’s easy to get lost because he’s practically speaking in tongues. I can’t understand most of what he says.
“I look every day, but I don’t trade every day. With penny stocks, you have to wait for something that’s moving. I don’t believe in these stocks,” Sykes explains.
King asks if he has received tips on bigger companies.
“I’ve tried them; I just haven’t grown my account that way. I’ve grown my account by trading active penny stocks because they’re so volatile. My top student has turned $1,500 into $2.7 million in four years. You can’t do that with big stocks.”
Sykes steers his response to one of his students.
King asks if his followers pay him. “Yes,” Sykes quickly responds while mentioning that his YouTube channel is loaded with many free videos.
“Why do you give away things?” King asks.
“I want people to learn. The reason why I got into teaching is that there was so much misinformation out there,” Sykes says. He adds that short-selling penny stocks isn’t illegal when you have a capable broker. I find it ironic that Sykes would use the word “misinformation,” given what little we know about him and his family.
King reads aloud a quote from Sykes about how he’s on a mission to “take bums off of the street and put them in Armani shoes.” Remember, this interview was conducted five years ago. How many homeless people have since received a pair of Armani shoes courtesy of The Timothy Sykes Foundation?
Timothy says that one doesn’t get to become a millionaire without studying spreadsheets. (Which spreadsheets should people study, and where are they?)
“You have to take weird strategies like mine,” he says, referring to them as “alternative strategies,” Sykes recommends for investors to look at specific stocks and trade them like a sniper. He tells King that he has a 74 percent win rate. The scary thing is, many people believe him.
King asks what his assessment of the market is, and Sykes replies, “It’s a guessing game, just as it always is.” You don’t have to play the stock market to formulate this answer. Have you noticed how most online stock gurus offer pearls of wisdom that most of us already know? They’ll say things like, “Don’t panic, remain calm,” “Be sure to think it through and never rush to judgment,” and “Do your homework.” It’s incredible to me how people will pay strangers to tell them the same things their parents told them when they were young.
Sykes says that his first big stock hit came when he was a college freshman at Tulane University in New Orleans. It was 1999, and he had invested $250,000 in a company that had technology that could reduce the “fuzziness” that interfered during cell phone communications. I can’t find any information on this company.
Apparently, during a weekend, he saw the company advertising their product on T.V. and a light went off in his head. When the market opened that Monday, the company’s stock was “gapping up.” He sold his shares and made $100,000, and a legend was born. Supposedly, he took his whole dorm out for dinner to celebrate. Again, I don’t believe one word of this story.
In a different interview, Sykes said, “I took the $12,415 and in my senior year of high school, made over $100,000. Freshman year of college, I made about $710,000 in profits.”
When I was watching the interview for the first time, the moment when I thought Sykes was a fraud was when he tells King that he grew up “middle-class.” I did some research on his past and discovered he was not middle-class.
His mother, Joann Sykes (72), is the great-granddaughter of Rudolph Libby, founder of Sykes-Libby Jewelers, a successful jewelry business that enjoyed a 95-year history. Timothy Sykes was an only child who grew up in Orange, Connecticut. He was also a high school tennis star. Sykes has been quoted as saying that he was the number one tennis player in the state.
He was set to play tennis for Tufts University. An injury to his elbows put an end to his tennis aspirations. He graduated with a degree in philosophy in 2003 from Tulane, which is true, but the school is anything but middle-class. The campus is known for its wealthy student body. Also, out-of-state tuition fees couldn’t have been cheap.
In 2005, Sykes launched Cilantro, a small and unsuccessful hedge fund that handled roughly $1 million. The money came from friends and family. This makes sense given that the address for Cilantro LLC was to an apartment in Connecticut under his father or stepfather’s name, Joel Leabman (61).
Timothy Sykes was born in 1981 in Orange, Connecticut. His mother, Joann Sykes, married Eugene Barufkin in 1984. I’m not sure when Leabman, who’s ten years younger than Joann, entered the picture, but Timothy Sykes routinely refers to him as his father.
For those of you who follow reality T.V., you might remember the series “Marrying Millions.” One of the cast members was Rick Sykes, a 69-year-old who told people he was 58 and lived on a yacht in Miami, Florida. Rick is Timothy’s uncle on his mother’s side.
In another example of deluded behavior gone wild, Sykes said his hedge fund’s failure wasn’t crucial because his story could “help ordinary investors understand the mechanisms behind the market and a trader’s mentality. What I lack in earnings, I make up for with brutal honesty.” I have with this problem that it probably wasn’t Sykes who lost the money, but rather Joel Leabman, a Registered Investment Advisor (RIA), unlike Tim.
In 2005, production was underway on the reality series “Wall Street Warriors.” Created and produced by Scott J. Gill and Sean Skelton, five of the six episodes of the first season featured Sykes. Joann also makes a few appearances as a doting and caring mother.
In 2006, a magazine listed Sykes in their “30 under 30” list of promising investors. The magazine’s managing editor would later reveal Sykes was their worst pick that year.
Sykes would tell people that his Cilantro hedge fund was “the number one long-short microstock hedge fund in the country, according to Barclays.” It was eventually discovered that the “Barclays” he often referenced was a small company based in Iowa.
Sykes has hundreds of thousands of followers on Twitter and YouTube.
I suspect over half of his online traffic, if not more, is fabricated. He’s a cross between a little league football coach and a used car salesman in his videos. He reminds me of those late-night infomercials in the ’90s that people would watch alone in their apartments as the drugs began to wear off.
When someone repeats themselves, it could indicate they’re lying, on cocaine, or think the person they’re talking to is an idiot. In one recent video, Sykes claims there are two words every trader needs to know if they want to be successful. For over ten minutes, Sykes repeats, “study hard.” I’m not sure how this video could benefit or inspire anyone older than the age of five.
As a general rule, one should never participate in a reality T.V. show. Ask anyone who has, and he or she will tell you how the experience destroyed their life. Of course, it’s nearly impossible to feel sorry for these people as they should have known better. Sykes could be the sole exception. He was the accidental star of the internationally acclaimed reality series “Wall Street Warriors.” It didn’t matter if his on-screen antics were fabricated. Young and aspiring traders who followed the show idolized Sykes and wanted to be like him. The show turned Sykes into a stock guru without him having to prove his trading skills. I suspect it’s Joel Aaron Leabman pulling the strings behind the Timothy Sykes curtain.
Leabman is an enigma. Unlike Timothy, he’s a Registered Investment Advisor (RIA). The Timothy Sykes Foundation website lists Leabman as the Student Support Coordinator. Joel Sykes is listed as the COO. They’re the same person.
In 2005, local media reported that Joann would be closing her family’s jewelry store. Apparently, she was tired of the heavy workload and wanted to “spend more time with her husband.”
“The most interesting and funniest mistake I’ve made was the fact I was drunk on every episode of the reality show. It gave me so much notoriety and fame and led to my teaching career, which led to my charity career,” Sykes said in an interview.
Sykes’ second hedge fund attempt, Cygnus E Transactions Group, also ended in failure. While he was unemployed, writing a book seemed to be the next logical step and probably his only option.
“American Hedge Fund: How I made $2 million as a Stock Operator and Created a Hedge Fund” is a self-published and unreadable fantasy account of make-believe money and phony success. The redundancy in the title reveals all you need to know.
Sykes would later launch Transparent Investment Management (TIM). Supposedly, within two years, he turned his initial investment into $90,368.
In an effort to promote TIM, Sykes launched Miss Penny Stock, a pageant featuring female representatives from his company. Bianca Alexa was crowned Miss Penny Stock 2013 and would become Timothy’s girlfriend and fiance. I suspect their relationship was a front as they haven’t been seen together in five years.
In 2011, Timothy co-founded Profit.ly, a website that provides stock trade information. Scanz, the people behind this technology, has filed a $10 million lawsuit against Sykes for I.P. theft.
In 2018, Timothy ditched his Armani-shoes-for-the-homeless campaign and gave the Timothy Sykes Foundation a facelift and name change.
Karmagawa is a charity aimed at saving the white rhino, coral reefs, and other pertinent issues in the Philippines. The L.A. Weekly said part of its uniqueness is how it didn’t accept donations. Much has changed since then, and sometimes we have to do what the market forces us to do.
In the top right corner of Kamragawa’s homepage is a donation tab that directs visitors to a PayPal screen. Donating has never been this easy.
To be clear, Karmagawa is not a charity. Its official name is Karmagawa Apparel LLC, and it was registered in Delaware and then transferred to Florida. Its operating status is listed as “inactive” and the name doesn’t appear on websites that offer information on established charities.
In March, Sykes said he loves traveling as it keeps his mind focused and thinks of himself as a “retired trader.” Sykes claimed that his charity has founded 67 schools and libraries. An online search came up empty when I tried to find the schools his organization has founded.
Today, Joel, Joann, and Timothy live together in a luxury condo in Miami, Florida.
