In his day-trading instructional videos, A.J. Haworth comes across as one part sports coach, one part self-help guru, and one part direct-sales hustler. Focusing mostly on patterns in stock prices and recent news about companies, he encourages quick moves in and out of positions with rapid clicks of a mouse.
“Wait right there, wait right there...I wait for the curl,” he says in a demonstration. “See how this curls up? They curl up. I’m buying right here...when it gets there, watch me buy. Ready. Here we go. Boom….up $60.”
“Gearing up, doing it again,” he continues. Like this...Buy that back, pop it back...I made $260 so far...You have no idea how easy it is to trade. You don’t.”
What he peddles through his Beverly Hills-based trading club AwesomeCalls looks like a far cry from Benjamin Graham-style value investing and fundamental analysis. There’s no discussion of alpha or beta, complex mathematical models, or deeply researched investment theses. He doesn’t preach placing big bets to get rich, but instead racking up a few hundred dollars here and there through a practice some call “scalping.” He makes it clear on his website that he is not a registered broker or advisor, and provides a long list of disclaimers.
Despite the caveats, he has won a loyal following. He has more than 1,700 members who pay him anywhere from $25 per day to $4,997 for two years to access his online courses, daily stock tips, live chatroom and other resources. In a recent interview with finance podcasters Hugh Henne and Dan Knight, he said he got into trading after running a successful mortgage company. He said he enjoys passing along his knowledge to other day-traders and providing emotional support during stressful moments.
“I’ve had the toys, I’ve had the Rolls Royces and stuff. Today my life is very humble,” he told the young investors on their show Pennies: Going In Raw. “I live in a good home, nice car. I enjoy my life. I’m doing what I love. I love trading and helping people.”
That's not quite how the California attorney general's office views the situation. In Feburary, the state sued AwesomeCalls and Haworth alleging that the company and its founder have been illegally selling personalized trading advice without proper credentials. Then-Attorney General Xavier Becerra said the the company was taking advantage of a wave of new market entrants who started trading online as the pandemic set in. Those newcomers have fueled the rise of online investor forums like r/WallStreetBets on Reddit and the massive success of trading app Robinhood, set to IPO this week.
Based on AwesomeCalls' own estimates, the service rakes in up to $35,000 per month in membership fees, equivalent to $420,000 per year, according to the agency's complaint. (Other associations readers may have with the number "420" and California are purely coincidental.) The state is seeking monetary penalties and an order barring Haworth and AwesomeCalls from operating without a securities license.
“You wouldn’t take legal advice from a fake lawyer, or medical advice from a fake doctor,” said Becerra, now the U.S. Secretary of Health and Human Services, in February.
California's case against AwesomeCalls appears to fall in line with other recent government crackdowns on online resources for day traders. The universe of (mostly uncredentialed) businesses providing advice and tips include innumerable online course offerings, chatrooms, Discord groups, YouTubers and other influencers, subscription media like Motley Fool, Benzinga and SeekingAlpha, and trading platforms like Robinhood. The latter, which aims to go public at an eye-popping $35 billion valuation, has been accused by a number of regulators of "gamifying" stocks and aggressively pushing newbie investors to trade.
Haworth has said he intends to fight the allegations. The company stopped providing services for California residents after learning of the state attorney general action.
The law at issue "has always maintained a registration exemption for protected First Amendment speech," said Edward Paltzik of Joshpe Mooney Paltzik LLP, one of the law firms representing AwesomeCalls, in an email to the Business of Business. "As technology has advanced and information spreads instantly, we believe platforms like AwesomeCalls would fall within the publisher's exemption of the Act."
Haworth has attracted other critics aside from the state attorney general's office. Some potential customers (and competitors) have declared that they think his pitch sounds too good to be true, calling him a "scammer," a "liar," a "clown" or a "con artist." On a review platform (run by a competing online trading resource business), almost all of the 16 users gave him one out of five stars. "All he does is screaming in the room," one user complained.
One anonymous Twitter account, GuruLeaks, which describes its mission as "helping expose fraud and deception," has posted a series of items about Haworth accusing him of buying social media followers, claiming to make trades when he had no "buying power," and creating fake Twitter accounts to sing his praises. One anonymous blogger has claimed GuruLeaks is itself a shill account for another online trading services provider who is "looking to build a reputation as an honest warrior for truth and justice by bashing everyone else." Reached over Twitter, the operator of GuruLeaks declined to discuss his or her identity.
Another day trader posted a more favorable review on a separate blog, saying that Haworth’s Twitter and his YouTube channel were “very helpful.”
“AwesomeCalls Trading is a fast-paced stock trading chatroom,” the trader cautioned. “The hardest thing for a new trader in AwesomeCalls Trading is that they can feel overwhelmed by the number of trades and the pace of the room.” The Better Business Bureau cites one complaint in the past three years for AwesomeCalls, over an apparent disagreement concerning an upgrade policy, and it is marked as “resolved.”
There isn't much publicly available information online about Haworth's past business dealings, but there is enough to suggest the story is more complicated than what he described to the finance podcasters Henne and Knight. According to legal records, Haworth's California-based mortgage business, International Mortgage Company, shut down around 2007. His related company, International Escrow, had its license revoked by the state that year over accusations of comingling funds, engaged in improper transfers and letting its trust fund fall below a required threshold. (A spokesperson for the state AG confirmed it was the same Haworth involved in both AwesomeCalls and the mortgage and escrow companies.)
Haworth filed for Chapter 7 bankruptcy in 2008, listing assets of $0 to $50,000 and liabilities of $10 million to $50 million. The case was discharged in October 2010.
Around the time the mortgage business was losing steam, Haworth learned trading from a penny stock investor during a trip to Las Vegas, he explained in an interview with the finance podcasters. Looking at charts of prices, he started to wonder if he could predict some of the movements ahead of time.
The investor said "nobody does that," Haworth told Henne and Knight. “In my world, the minute someone tells me ‘no one can do that,’ that’s my signal. No means possibilities, there’s opportunities.”
Haworth launched AwesomeCalls about nine years ago, offering detailed trading picks and price movement predictions. No detailed statistics are provided on his website about his accuracy, although he claims to have a “90%” success rate.
The trading club founder's Twitter account currently has 68,600 followers. He frequently retweets users, both anonymous and not anonymous, who express enthusiasm for his work.
“@AjTrader7 is truly a beast,” tweeted Brandon Kendrick, president of a Florida construction company. “The probability for return on investment is high with ACT! And this is coming from someone that has seen what different traders/discord groups do.”