The giant investment banks like to pretend they are high class, but every once in a while you see them for the ass-lickers they are. Take this article in the New York Times, describing the efforts of the big finance companies to woo newly rich tech people as clients. Goldman Sachs took one of these guys for a factory tour of Tesla and to see a screening of the last Harry Potter flick. There are a lot of people who will make a bunch of money as a new round of IPOs for Facebook, Groupon, and Zynga hit the market, and the insiders will get rich. It won’t just be the top dogs, either. There will be plenty of money going to developers and even (gasp) administrative assistants. All are fair game:

”Someone’s going to capture this wealth,” said Derek Fowler, a wealth adviser at Morgan Stanley. “We just want to make sure we’re out there.”

But there’s a problem: these people aren’t traditional prospects for the Prada-clad MBAs who work for the money-sniffers. Merrill Lynch is asking its young brokers for advice on how to reach the geeks, as if a bunch of frat boys moving from legacy college admission to daddy’s stock broker have a clue about the smart kids. I’m sure most tech people know that those juniors know about as much about investing as they do about Drupal.

It reminds me of one of my favorite cases, CFTC v. Crown Colony Commodity Options, Ltd., 434 F.Supp. 911 (S.D.N.Y. 1977). Crown Colony was a boiler room operation selling commodity options, using canned sales pitches. First you get a call from some guy you never heard of who reads a script, called a front, designed to awaken your greed and qualify you as someone with free money. If you qualify, you get “papered” with brochures and other sales literature full of lies and half-truths. Then you get another sales pitch called a drive, again full of deceptive and misleading statements trying to pressure you into purchasing.

Here are some of the scripts:

I’m particularly bullish on natural rubber and I know it’s a very underpriced situation and I think it’s an opportunity to take $4,400 [and] turn it into $16,000 by the end of fall.

What we’re talking about is a 33,000 lb. contract therefore each time rubber moves one penny that’s equal to $330.

Mr. , your option runs ’till March 77 . . . but more important, we’ll be out by the end of summer, beginning of fall at the latest — we’re talking about a five figure return on a $4,400 investment. I’m talking about $16-17,000 or quadrupling your investment. Is that fair enough????

Crown Colony operated from Miami, in a call center rented from a company which used it during the day to sell wigs and chemicals. No, really. There were 50 cubicles, each with a telephone and a desk. There was a monitoring system that permitted supervisors to listen in on any call. The supervisors had directional microphones that enabled them to talk to the salesmen without being overheard by the customer. One former supervisor testified that salesmen were encouraged to use the word “greed”.

According to his testimony, potential investors were referred to as “mooches,” and salesmen were told that “the mooch has your money in his pocket.” (fn. 17)

The CFTC won this case.

I wish all these newly-rich folks well. They did something cool and valuable, and I hope they enjoy the big bucks. Now the question is whether they can protect themselves from the sharks. They could do worse than listen to Travis Kalanick, a co-founder of an on-demand car service. He hired a broker to help him with investments.

But he grew skeptical after the adviser suggested a complicated investment that would make money only if a stock index fell within a narrow range.

“I felt like I was walking into a casino, where the dealer knew more than I did,” said Mr. Kalanick, who eventually left the brokerage firm.