For people looking to gain a financial foothold, promises of $100,000 or more in “verified profits” in “under 45 days” are understandably alluring. But all too often what begins as a Siren’s Song ends in a Swan Song as people lose their life savings to the promoters of bogus schemes. The FTC has announced a $3 million settlement with an outfit known as Warrior Trading and its CEO Ross Cameron for using allegedly misleading investment claims to convince consumers to shell out hundreds or even thousands of dollars for a trading “system” that left most of them on the financial rocks.
Massachusetts-based Warrior Trading pitched its programs as “a quick and simple way to get your dream of day-trading success going.” The defendants weren’t talking about a little pocket money on the side. Consider the kind of claims they made on their website:
- “Learn How I Made over $101,280.47 in Verified Profits Day Trading Part Time in Under 45 Days Using 3 Simple Strategies that You Can Use Immediately to Increase profits and Reduce Losses NOW!”
- “Start trading over my shoulder side-by-side with me because I guarantee you that next week, the week after, the week after that, I’ll be trading the one or two stocks each day that move up 20 to 30 percent.”
Warrior Trading initially steered consumers to a “FREE Day Trading Webinar,” but the FTC says that’s where any semblance of “free” ended. Next came the spiel to shell out cash for more “programs” that supposedly taught people how to “easily find the right stocks to trade” so they could “produce big winners.” According to the complaint, that was the fantasy, but here are the facts. The FTC says most customer accounts actually lost money, meaning that people took a financial hit both on the defendants’ “programs” and on their trading losses.
The complaint charges Warrior Trading and Cameron with violations of the FTC Act and the Telemarketing Sales Rule. In addition to injunctive provisions, the settlement will return $3 million to consumers who lost money due to the defendants’ deception.
The case serves as a reminder to prospective entrepreneurs about the risks posed by fast-talking, fast-money pitch people who use deceptive earning claims to sell their investment “systems.”
It’s also an opportunity to update promoters on recent initiatives related to money-making claims. In addition to law enforcement actions challenging misleading earnings claims, the FTC has sent Notices of Penalty Offenses to 1,100 businesses, letting them know that future misrepresentations could trigger hefty financial penalties. The FTC also has announced an Advanced Notice of Proposed Rulemaking concerning false, misleading, and unsubstantiated earnings claims.
Ten years too late, and too little! But at least finally the FTC is doing something. Emphasis on the "at least", but better than nothin!
...Now how do I get my money back from the $3 million dollars settlement???!!! That's another story...