|
PureBytes Links
Trading Reference Links
|
FYI - this is a thread on the Omega list that is interesting. Just thought
maybe you'd like to know. Chuck
----- Original Message -----
From: Roger D. Rines <rdrines@xxxxxxxxxxx>
To: Omega-List@xxxxxxx Com <omega-list@xxxxxxxxxx>; RealTraders Discussion
Group <realtraders@xxxxxxxxxxxxxx>
Sent: Friday, May 07, 1999 6:33 PM
Subject: CFTC Case Update
> Some of you know that there has been a move afoot by the CFTC to
> regulate all individuals, businesses, developers, newsletters,
> subscribers, web sites and mailing list (including this one) that
> discuss matters pertaining to trading and futures.
>
> Well after many years of watching the wheels of justice grind ever so
> slowly, the case was finally heard this week in federal court and a
> decision will be presented in about two weeks.
>
> It is hard to understand how the judge will rule on the case but from
> looking at the how trial went we might be able to keep some of the
> freedoms we currently enjoy, of which this list is one, without
> requiring all those to post here to be registered as a CTA.
>
> If we don't win, all the facts that were important to the case were
> allowed into evidence in the trial and will be available for the
> appeal.
>
> The Institute for Justice represented us in this case and they have
> put the case and trial log up on their web site for review. Their
> address is: http://www.ij.org/cftc/
>
> They worked for years on this and they didn't charge us. It is hard
> not to feel good about them. They took ten of us under their wing
> when we were floundering and helped us get the governments attention
> and if we are lucky, will force the CFTC to stop.
>
> I wonder how many people even knew this was going on?
>
> Roger...
> mailto:rdrines@xxxxxxxxxxx
>
>
----- Original Message -----
From: Ron Augustine <RonAug@xxxxxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Friday, May 07, 1999 9:47 PM
Subject: Re: CFTC Case Update
>
> I haven't followed it, but it's always nice to learn that some White
Knight
> is still out there looking for a battle to ride into.
>
> But don't ever kid yourself into thinking that a discussion group (or even
> an advisory group) could be silenced by laws. There's always anonymous
> posting and PGP encryption if things ever got that restrictive.
> The biggest threat to free participation in a group like this is
censorship
> from within.
----- Original Message -----
From: Phil Lane <accumulator@xxxxxxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Sunday, May 09, 1999 9:27 AM
Subject: CFTC Case Update
> >Some of you know that there has been a move afoot by the CFTC to
> >regulate all individuals, businesses, developers, newsletters,
> >subscribers, web sites and mailing list (including this one) that
> >discuss matters pertaining to trading and futures.
> >
>
> I don't know about armchair investors and their mailing lists, but in my
> opinion ANYONE accepting compensation for their "advise" or "market
> opinion" "indicators" or "miracle trading system" should DEFINITELY be
> required to pass the test and gain their registration. Why the hell NOT?
> Also while we're at it, let's require those talking heads on cnbc to
> register as well. After all millions of anxiety-ridden investors are
> hanging on their every word, every day.
>
> The net effect of all this is to create an endless stream of confusion and
> uncertainty. In the end it causes nothing but HARM. The only people it
> helps are the brokers, who thrive on the increased order flow. I would
> estimate that less that 1% of the purveyors of market information actually
> know what they're talking about, and have something to contribute which
may
> be in YOUR best interest, not theirs. So let's get rid of the rest, it
> would be a tremendous improvement.
>
> regards
> phil (registered with the CFTC but will spare you my market opinion)
>
----- Original Message -----
From: Dtrader <dan@xxxxxxxxxxxxxxxxx>
To: Omega List <omega-list@xxxxxxxxxx>
Sent: Sunday, May 09, 1999 9:39 AM
Subject: Re: CFTC Case Update
>
> I'll tell you "why the hell NOT."
>
> Are you familiar with the little concept known as "freedom of speech" ??
>
> It has faR more significance in our daily lives than your petty gripes
> concerning talking heads and scam artist hucksters.
>
> Think in big, macro terms. not little ones.
>
----- Original Message -----
From: tj <tradejacker@xxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Sunday, May 09, 1999 11:04 AM
Subject: Re: CFTC Case Update
> if we go down that slippery slope, then YOU may find a gummit agent
> knocking on YOUR door, telling YOU what system YOU may or may not sell
> since THEY regulate the entire process. that's "why the hell NOT"!!!!!
>
> i can tolerate a flood of scammers and talking heads and newsletter
> writers 'cause i know that there will be UNREGULATED lists such as the
> Omega List who'll get the word out on the bottom feeders. besides, the
> same fears you espouse DID NOT occur in the stock market arena when the
> u.s. supreme court told the sec to go f-itself many years ago.
> hopefully, it will do so again but this time to the cftc.
>
> TJ
>
> freedom of any speech, no matter how offensive, is guaranteed by the
> constitution; we don't need anyone telling us what is "proper" speech,
> thank you very much
>
> oh yeah, two thumbs way up for manning stoller's testimony in the case;
> way to go manning!!!!
>
> another oh yeah, did you know that cftc agents are now allowed to carry
> concealed handguns? i ask "why the hell FOR?"
>
----- Original Message -----
From: cb <cpbow@xxxxxxxxxxxxx>
To: Omega-List@xxxxxxx Com <omega-list@xxxxxxxxxx>; RealTraders Discussion
Group <realtraders@xxxxxxxxxxxxxx>
Sent: Sunday, May 09, 1999 1:08 PM
Subject: Re: CFTC Case Update
> Roger D. Rines wrote:
> >
> > Some of you know that there has been a move afoot by the CFTC to
> > regulate all individuals, businesses, developers, newsletters,
> > subscribers, web sites and mailing list (including this one) that
> > discuss matters pertaining to trading and futures.
> >
> > ...........
>
>
> My opinion is that the CFTC/NFA shouldn't regulate what writers say, but
> should mandate the inclusion a much more illustrative brochure on the
> hazards of
> trading. I know that all but a few of the newest traders on this list
> know the risks and steps to take to minimize them. However, the mass
> mailing dream merchants continue to sell people on making a fortune
> starting with 1-5 grand. Here again, I believe everyone should get to
> do what they want *if they understand the risks*
> (and assuming the brokerage feels secure taking the account). When a
> "course" encourages opening a $2500 account, not listening to brokers
> (warnings), teaches little or nothing about $management, shows few or no
> losses in 15 months in the newsletter, assures the reader that his
> method will put them in the 10% winner group, discourages other sources
> of learning other than his own add-on courses what do you think the
> results are? Ken Roberts sells something like 20,000 of these courses
> per year. If 15,000 people open $2500 accounts, how many are trading a
> year later?
>
> I strongly believe in free speech. But I have conflicting impulses
> here.
>
> What are the analogs? Many professionals have to be licensed if they
> practice their prof. on individuals (or their houses, etc.). It makes
> sense that money-managing CTAs be licensed. Publishers/programmers do
> not typically provide *individual* advice. Therefore I have come to the
> conclusion they should *not* have to be licensed.
>
> But there are other analogs. Kellogs cannot state that eating a box of
> Frosted Flakes a day will prevent cancer unless it has some evidence
> that it will do so. I can't sell you concentrated hydrochloric acid as
> a cheap drain cleaner without an MSDS at a minimum and I'm not sure I
> could sell it to the average consumer at all.
>
> Therefore I believe that publishers/programmers should be subject to:
> 1. truth in advertising claims restrictions
> 2. mandatory warnings about risks involved
>
> Anyone should be able to say corn is going to go up. anyone should be
> able to say buying corn at 2.00 with a stop at 1.90 would be a cool
> trade. However, their advertising about their newsletter should be
> truthful. In addition I don't think it would be intrusive or a
> violation of free speech to require that if you state the profits per
> year, you also state the account size required and average drawdown
> since publication began. This would be similar to the standardized
> nutrition guides put on foods (which I think is a good idea - I look at
> the fat number all the time in choosing what to buy).
>
> With commodity courses, I think it not unreasonable to mandate
> warnings. Most do put in the boilerplate warnings but many have content
> that contradicts it. Many many people read 180 pages of Ken Roberts
> first course, most of which say how sure-thing trading is (with a
> $1000-$5000 account!). His advertising materials state this is a good
> thing for struggling families to try. In the course, money management
> isn't mentioned, losses don't appear in the newsletter, it's suggested
> you trade after 3 months of paper trading, ignore non-KR methods, ignore
> your broker even though you're paying Mainstreet $100/RT.
>
> With the courses, the gov't could try to enforce a "balance risk reward"
> standard (I think the NFA might actually do this to members). However,
> instead of interfering with the writing in the course which raises free
> speech issues, I think the best bet is to mandate that a
> industry-approved brochure be included with the ads and with the
> course. I think it needs to be more dramatic than the "black type"
> warnings at the bottom of most ads. A brochure with a graph of the
> average return in the first year for $2500 accounts might bring people
> back to earth long enough to evaluate critically what the course is
> trying to tell them.
>
> I don't think this would be a free speech violation. Instead may the
> "side" (nfa or the course) that presents the best case in the written
> materials win! That's what free speech is about in fact.
>
> Most subscribers on these lists are experienced traders. Some are in
> fact the writers or programmers whose rights are being trampled on. Yet
> let's not forget the people who have never heard of futures, and who
> just got an ad for a course that says it will help them get out of debt
> and be rich if only they can scrape together $2500. I don't know if
> this is the motivation for the cftc or not. I do think maybe they are
> off course. OTOH, I believe truth in advertising and a revamped,
> mandated warning would not infringe unduly on free speech but rather
> serve as needed regulation.
>
>
> Conrad Bowers
----- Original Message -----
From: tj <tradejacker@xxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Sunday, May 09, 1999 3:53 PM
Subject: Re: CFTC Case Update
> problem is with the word "compensated." if i post recommendations on a
> website that's provided to me free, is that compensation? i'll bet you
> that the cftc would take that position under its proposed more
> restrictive regulations. and that opens up another can of worms.
>
> government regulation does not guarantee competency in ANY
> field....period. i'm not sure that it even lessens risks or prevents
> potential harm to the consumer. but word of mouth is the best deterrent
> against the scammers and incompetent, not more government regulation.
> an educated public is the best first line of defense in the prevention
> of fraud and purveyors of false hopes and dreams.
>
> TJ
>
> as always, let the buyer beware
>
> --- Carroll Slemaker wrote:
> > Note that Phil limited his recommendation to those being COMPENSATED
> > for
> > their "advice" and that would exclude forums and lists such as this
> > one. I
> > agree with this. Should medical and legal practitioners, for
> > example, also
> > be free of any registration or licensing requirements?
----- Original Message -----
From: <ManningSto@xxxxxxx>
To: <omega-list@xxxxxxxxxx>
Cc: <ManningSto@xxxxxxx>
Sent: Sunday, May 09, 1999 4:34 PM
Subject: Re: CFTC Case Update
> A few bits of information for all.
>
> In 1975-6, the advisory committee for trading professionals voted
> overwhelmingly requiring an examination on futures basics be required for
> CTA's. The CFTC irgnored this recommendation thus allowing almost anyone
who
> didn't have a criminal record to become a CTA.
> We didn't agree with this - what was the sense of registration if there
are
> no registration requirements (outside of breathing)?
> We never intended publishers such as the Wall St Journal, Barrons, etc to
be
> subject to registration and they are exempt.
> In the mid 80's when Lowe took the SEC to the supreme court, Lowe won. The
> substance was that if there is no personal advice, no power of attorney
and
> no control over the account, the publisher is not considered a
"professional"
> and thus not subject to registration (by the SEC).
> The CFTC decided to ignore the Lowe decision and required that all
publishers
> who give advice or just mention any commodity must be registered. This
means
> that if you want to say that the Dow is going to 25000, that's OK. But if
you
> say that Gold is going to $245, that's a violation of the CFTC
registration
> requirements.Keep in mind, because it's very important to understanding
the
> case, that we are talking about those publishers that NEVER give personal
> advice to anyone. As soon as you give personal advice, you must be
registered
> - end of story.
> Think about what the CFTC is trying to do and then apply it to any
> information service in any field.
> In my opinion, the only people that should be registered as CTAs are money
> managers, those who have a power of attorney aand those who give personal
> advice.
> The newsletter writers who send the exact same newsletter to 100 or 1,000
or
> 10,000 subscribers should not need to be registered. There is no
examination
> required so registration doesn't do anything to protect the public.
>
> Prior restraint of speech is illegal in the United States. By requiring
> registration in order to write a newsletter, that is prior restraint.
>
> Best wishes to all
> Manning Stoller
----- Original Message -----
From: Roger D. Rines <rdrines@xxxxxxxxxxx>
To: <cpbow@xxxxxxxxxxxxx>
Cc: Omega-List@xxxxxxx Com <omega-list@xxxxxxxxxx>; RealTraders Discussion
Group <realtraders@xxxxxxxxxxxxxx>
Sent: Sunday, May 09, 1999 5:05 PM
Subject: RE: CFTC Case Update
> -----Original Message-----
> From: cb [mailto:cpbow@xxxxxxxxxxxxx]
> Sent: Sunday, May 09, 1999 10:55 AM
> To: Roger D. Rines
> Cc: Omega-List@xxxxxxx Com; RealTraders Discussion Group
> Subject: Re: CFTC Case Update
>
> [ big snip ]
> |
> | My opinion is that the CFTC/NFA shouldn't regulate what writers
> say, but
> | should include a much more illustrative brochure on the hazards of
> | trading. I know that all but a few of the newest traders on this
> list
> | know the risks and know much better than i the steps to take to
> minimize
> |
> | If you are not interested in this subject I apologize for wasting
> your
> | time. But if you have an opinion, I'd be interested: what
> *should* the
> | regulators be doing -if anything - about the misleading courses
> sold to
> | the public?
>
> [ another big snip ]
>
> | Conrad Bowers
>
> >From the perspective of one of the plaintiffs in the case, I
> interpreted the CFTC rule expansion as an abdication of
> responsibility. Their rule changes to restrict all unregistered
> speech about all commodities in and on all media was a lazy attempt
> to curb the fraud that goes on in the commodity industry.
>
> It seemed that if they could get everyone to fall under the umbrella
> of a CTA, then that alone would filter out the felons. By being
> registered as a CTA, you immediately become subject to NFA/CFTC
> audits. These audits would allow them to have unrestrictive access
> to all of the registered person's information whenever they want, as
> often as they want and without the need for a search warrant. This
> would make the job of finding and stopping fraud easier.
>
> While their motives might have been good, their approach of licensing
> all commodity speech was a cure that was worse than the disease.
> Failure to comply with their rules would immediately subject
> unregistered people involved in commodity discussions to a $500K fine
> and possible jail time. It wouldn't take many CFTC prosecutions
> before their enforcement actions would chill speech. For sure those
> who understood how to be successful with trading and had the most to
> loose would be the least likely to say anything. Not the best way to
> keep the industry viable, expanding and healthy.
>
> Another aspect of the rule changes that made no sense was the lack of
> any qualitative measures for those who would be registered. This
> said they will license speech but the performance of the people won't
> change. With licensed speech they just won't need to work so hard to
> find the crooks. The new rules they were trying to enforce and those
> already in place now don't go to the heart of the matter of fixing
> what is not working well. If they win this case the problem areas
> won't change. In some respect, their underlying strategy was to
> expand their revenue base without implementing any real improvements.
> If they were a management team of a "for-profit" company they would
> be fired by the board. Their actions were no different than what
> some people do in dealing with difficult situations by using creative
> accounting.
>
> If you listen to the CFTC, you'll hear their motives are defended by
> a CEA mandate to remove fraud. However, fraud has always been
> illegal and there are plenty of laws already that allow them to
> remove it. It doesn't take rocket science to understand who is
> malignantly using smoke and mirrors. If they aren't up to speed on
> illusions they could just ask some of the walking wounded on these
> mailing list for ideas. Imagine only being able to buy books from
> licensed writers. Why then should they want to take away free speech
> rights of all interested people to achieve that goal?
>
> What could be different:
> I believe fraud is another form of violence which explodes a
> dreamer's current path and shouldn't be tolerated. However, the
> government shouldn't be triggering neutron measures that kill entire
> communities in order to eliminate infections.
>
> The CFTC's next move, if they get stopped with their current terror
> campaign, should be to look at fraud differently and get more
> involved in understanding how people use information. An example
> would be to talk to those who are using it. In other words, change
> their operating paradigm from that of a control center to that of a
> service center.
>
> Once they have a users perspective, they will know where to go to
> stop the problem behaviors. They will also understand the importance
> of education and easy access to information in limiting the damage
> fraud can inflict on the uneducated. They will also be able to
> understand the problems that registered people create and be able to
> stop them in a positive manner.
>
> With the expansion in web participants, the ability that dishonorable
> entities had to hide is coming to an end. Virtual communities have
> the ability to expose even the most slippery of characters. If
> someone causes damage these days, it can be everywhere in a matter of
> minutes. This kind of protection is priceless and should be defended
> with everything we can muster for it is a protection the government
> will never be able to provide.
>
> This opinion is just mine and may not represent what others in the
> action were thinking.
>
> Roger...
> mailto:rdrines@xxxxxxxxxxx
>
----- Original Message -----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>;
<omega-list@xxxxxxxxxx>
Sent: Sunday, May 09, 1999 5:17 PM
Subject: Re: CFTC Case Update
> In the case of newsletter writers, it appears to me that the activity
being
> regulated is publishing, not personal advice, and publishing is cleared
> protected by the First Amendment. I would however require registration and
> audits for all newsletters, software, etc. which make any trading claims
> based on anything other than real-time trades published in a newsletter.
>
> I find it ironic that the government generally seems to place higher
> priority on new methods of curtailing liberties than on enforcing the laws
> already on the books. The effort expended on such activities seems to be
> inversely related to the percentage of bureaucrats which have had to pay
> for those liberties with blood, sweat, and tears. When it comes to
trading,
> imagine if the CFTC made a real effort to see that the trading floors were
> brought into the 21st century, that full and complete audit trails existed
> every step of the way from customer to floor and back, and that exchange
and
> broker electronic order systems had the degree of reliability which is
taken
> for granted in every other major industry. In short, if the CFTC were
doing
> its job, it wouldn't have time to monitor every individual with an opinion
> on the markets.
>
> Earl
|