002-3025

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

In the Matter of

WFS ENTERPRISES, INC. d/b/a THE CASH NURSERY, a corporation, and
RABB SABIN, and ARTHUR SMITH, individually and as officers of the corporation.

DOCKET NO. C-3993

COMPLAINT

The Federal Trade Commission, having reason to believe that WFS Enterprises, Inc., d/b/a The Cash Nursery, a corporation, and Rabb Sabin and Arthur Smith, individually and as officers of the corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent WFS Enterprises, Inc., d/b/a The Cash Nursery, is a Nevada corporation with its principal office or place of business at 2914 East Katella, Suite 212, Orange, California 92867.

2. Respondent Rabb Sabin is an officer of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporation, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of WFS Enterprises, Inc.

3. Respondent Arthur Smith is an officer of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporation, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of WFS Enterprises, Inc.

4. Respondents have advertised, offered for sale, sold, and distributed stock and commodity futures trading training and computer programs to the public. Respondents advise their clients to buy and sell specific commodities futures and/or stock and/or commodities options on a daily or weekly basis. Respondents sell their program and training through their Internet Web site, www.the-cash-nursery.com.

5. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

6. Respondents have disseminated or have caused to be disseminated Internet advertisements for their commodity and stock option trading programs and training, including but not necessarily limited to the attached Exhibit A, pages 1 through 14. These advertisements contain the following statements:

a. "90% WINNING TRADES" and "a proven strategy with a 90% success rate...really!"

b. "[O]ur extraordinary trading methodologies and strict money management principles produe an average of 80-90% winning trades."

c. [Chart: as of April 1999]
MONTH % SUCCESSFUL TRADES
January 88%
February 100%
March 79%
April 82%
May 86%
June 94%
July 91%
August 95.5%
September 96%
October 96.4%
November 95%
98 - Average 91.18%
January - 99 89%
February 90%
March 88%
April 94%
99 - Average 90.25

d. "When we first developed TCN's trading methods, we back-tested thousands of possible trades over a twelve-month period. The computers ran 24 hours a day for one full month. The outcome? Believe it our not, the system was 96.7% accurate in selecting successful trades."

e. "Investment returns we enjoy on stock options average 150% - 500%, while returns on commodity options average 100% - 400%."
 
f. "At the time of the interview, Rabb had just made $100,000 plus in a Coffee Trade. He went on to turn that amount into over $500k by the year's end."

g. [consumer testimonial] "Within my first week with TCN, I invested $280 for a return of $1020 and $425 for a return of $1200. That is an incredible 314% return on investment."

h. [consumer testimonial] "I grossed $12,953 in my first month with The Cash Nursery. I'm not talking about once in awhile big profits."
 
i. [consumer testimonial] "First, I got a call in hogs and made $832 profit in 9 days! Then I got a put in hogs and rode that sucker back down and made $1,755 in 10 days. That combined with my other trades made me more money in 2 weeks than I make in 4 MONTHS at my current job! My favorite part of the entire methodology is that I am usually in and out of the trade with my profits in 10 days or less!"
 
j. [consumer testimonial] "I hit my sell stop in Swiss francs today at 105 points. Excellent! My Feb[ruary] Swiss France 68 put cost 34 points, and sold at 105 points. So ... 105-34 = 71 points. 71 x $12.50 = $887.50 gross profit. That's over 300% gross profit!"

k. "System Trades©, a proprietary program, shows you how to turn $500 into $52,700."

7. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that:

a. Users of respondents' commodity and stock option trading program can reasonably expect to earn large profits, or as much as six figures annually.
 
b. Users of respondents' commodity and stock option trading program can reasonably expect consistent investment returns of 100% to 500% on their trades;
 
c. Users of Respondents' commodity and stock option trading program can reasonably expect 95% or more of their trades to yield returns of 100% or better;
 
d. Testimonials appearing in the advertisements for respondents' commodity and stock option trading program reflect the typical or ordinary experience of members of the public who use the program.

8. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 7, at the time the representations were made.

9. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 7, at the time the representations were made. Therefore, the representation set forth in Paragraph 8 was, and is, false or misleading.

10. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that users of respondents' commodity trading program can reasonably expect to trade with little financial risk.

11. In truth and in fact, users of respondents' commodity and stock option trading program cannot reasonably expect to trade with little financial risk. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading.

12. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this twelfth day of January, 2001, has issued this complaint against respondents.

By the Commission.

Donald S. Clark
Secretary

SEAL