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<html lang="en-US" xml:lang="en" xmlns="http://www.w3.org/1999/xhtml";><head><title>CFTC Press Release 4628-02</title><!--begin meta--><meta name="description" content="CFTC Press Release 4628-02" /><meta name="whatsNewUrl" content="" /><meta name="whatsNewAnchor" content="" /><meta name="whatsNewText" content="Florida Commodity Trading System Developer and New York Publisher Settle CFTC Fraud Action" /><meta name="file" content="opa4628-02.htm" /><meta name="keywords" content="CFTC Press Release 4628-02" /><meta name="office" content="opa" /><meta name="whatsNewDate" content="04 Apr 2002" /><meta http-equiv="expires" content="31 Dec 2005" /><!--end meta--><!--begin style sheet--><link rel="stylesheet" type="text/css" href="/cftc/cftcprint.css" /><!--end style sheet--></head><body><!--begin content-->
<p>
<b>Release : 4628-02 (CFTC Docket No. # 02-10)</b><br clear="none" />
<b>For Release: April 4, 2002</b>
</p>
<p align="center">
<font size="4"><b>Florida Commodity Trading System Developer and New York
Publisher Settle CFTC Fraud Action</b></font>
</p>
<p style="text-align:justify">
<b>CFTC Finds that George Angell, TradeWins Publishing and
its President, Stephen Schmidt, Fraudulently Marketed Commodity Trading
System</b>
</p>
<p style="text-align:justify">
<b>Washington, D.C.</b> – The Commodity Futures Trading Commission
(CFTC) announced today the acceptance of offers of settlement from <a href="/files/enf/02orders/enfangell-order.pdf" shape="rect">George
Angell</a>, of Key West, Florida, <a href="/files/enf/02orders/enftradewins-order.pdf" shape="rect">TradeWins
Publishing Corp</a>. (TradeWins), of Smithtown, New York, and its president,
<b>Stephen A. Schmidt,</b> of St. James, New York. In an action filed
on March 6, 2002, the CFTC issued an order simultaneously instituting and
settling an administrative action against Angell, a developer of commodity
futures trading systems. In a second action filed on April 4, 2002, the
CFTC filed an order simultaneously instituting and settling an
administrative action against TradeWins, a publisher and marketer of
investment related books and products, and Schmidt, TradeWins’s
president. In each order, the CFTC finds that Angell, TradeWins and Schmidt
fraudulently marketed Angell’s trading system.</p>
<p style="text-align:justify">
The orders accompanying the settlements find that for approximately a
three-year period beginning in January 1996, Angell, TradeWins and Schmidt
fraudulently solicited members of the public to purchase a version of the
LSS Day Trading System (“the LSS System”), a signal-based
computerized commodity futures trading system. According to the orders, the
public was solicited through a series of promotional brochures, which
falsely represented that the LSS System’s performance record was based
on Angell’s actual commodity trading. In fact, the orders find that
the performance results were derived from hypothetical back-testing. The
promotional brochures further suggested that prospective customers could
review Angell’s personal trading account records when, in truth, these
records were not available, according to the orders.</p>
<p style="text-align:justify">
The orders further find that the promotional brochures falsely represented
that the LSS System’s performance results had been independently
audited and verified. In fact, according to the orders, the firm that
purportedly verified the results was not independent. Rather, the orders
find that the firm had a financial interest in the success of the LSS System
because it was compensated on the basis of the profits earned by the sale of
the LSS System.</p>
<p style="text-align:justify">
The CFTC orders find that by such conduct, Angell, acting as a commodity
trading advisor, defrauded clients and prospective clients, and that Schmidt
aided and abetted that fraud, in violation of the Commodity Exchange Act
(CEA) and CFTC regulations. The orders find TradeWins responsible for the
fraudulent actions of its officer, Schmidt. Angell, TradeWins, and Schmidt
consented to the entry of the orders without admitting or denying the
findings therein.</p>
<p style="text-align:justify">
The CFTC orders:
</p>
<ul>
<li>
direct Angell, TradeWins and Schmidt to cease and desist from further
violations of the CEA, as set forth above;
</li>
<li>
require Angell to pay a $50,000 civil monetary penalty within ten business
days of entry of the March 6, 2002, order and to agree not to seek
registration for a period of three years;
</li>
<li>
require TradeWins and Schmidt to jointly and severally pay a $100,000 civil
monetary penalty within ten business days of entry of the April 4, 2002,
order; and
</li>
<li>
require them to comply with certain undertakings, including undertakings
that prohibit them from making misrepresentations regarding profits and
risks associated with trading futures or options.
</li>
</ul>
<p style="text-align:justify">
A copy of the CFTC orders may be found at http://www.cftc.gov</p>
<p style="text-align:justify">
The following Division of Enforcement staff members are responsible for the
case:
<br clear="none" />
Joseph Rosenberg<br clear="none" />
Christina Kang<br clear="none" />
David Acevedo<br clear="none" />
<br clear="none" />
____________<br clear="none" />
<br clear="none" />
</p>
<p>
<b>Case Contact:</b><br clear="none" />
<br clear="none" />
Charles J. Sgro<br clear="none" />
Regional Counsel<br clear="none" />
Division of Enforcement<br clear="none" />
Eastern Regional Office<br clear="none" />
(201) 234-6926
</p>
<!--end content--><!--begin footer--><hr /><center><font size="-3">Updated April 4, 2002</font></center><!--end footer--></body></html>
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