Grandmother Clause

The Beardstown Ladies, those homespun, grandmotherly investors whose supposed success created a mini-industry, are being called frauds.

And senior partner Betty Sinnock, who celebrates her 66th birthday Saturday, can’t say whether the charge is true.

A long-unnoticed disclaimer on the copyright page of the “The Beardstown Ladies’ Common-Sense Investment Guide” says the annual return during the decade covered in the book--which the ladies put at 23.4% -- “includes the dues that the members pay regularly.”

Oops, that’s not the way it’s done.

It would mean their total returns were nowhere near as robust as claimed and would probably spell the end of the little industry the investment club has spawned.

The ladies met Friday at the Chamber of Commerce on the town square in Beardstown, Ill., to try to figure out what to do. Beneath a giant banner that read “Beardstown Ladies Investment Club,” they pored over their figures.

“We’ve always thought that our purpose was to educate, and we didn’t mean to mislead anyone,” said Carnell Korsmeyer, 70.

“We’ve tried to share from our own experience, like grandmothers, to help others,” Sinnock said Friday.

“We have never personally attempted to brag. We’re very pleased and very proud of what we have, but that’s not what we’re about,” she said.

Sinnock still could not say whether the club counted dues as part of its total return. She said they will hire an independent auditor to go over the club’s books.

She said she was “just sick” about the matter, which went unnoticed until Chicago magazine published an article this month titled “Bull Marketing.”

If the club added monthly dues to stock dividends and appreciation, then its actual results were less than spectacular. That could also be the end of members’ publishing careers, television appearances and occasional work as money-management experts.

Jennifer Landers, a spokeswoman for the book’s publisher, Walt Disney Co.’s Hyperion, said the ladies are honest and never tried to deceive anyone.

“If there’s been a mistake, it’s just been a mistake,” she said. Future editions of the best-selling book will contain any necessary corrections to the total return, she said.