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So now the question is - how did Dr.John produce a $170,000 gross profit
with Mastersuite if it is in fact a "charlatan" system. In other words
perhaps the "right" trader could make money with even the worst of
systems.??? Just food for thought.
RDR
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> From: sptradr@xxxxxxxxx
> To: omega-list@xxxxxxxxxx
> Subject: S&P 500 System Update #3
> Date: Wednesday, May 13, 1998 7:54 AM
>
> john cappello wrote:
>
> >>> P.S. to Randall and a couple of others who asked about my other
trading
> profitability.Here is the perspective---Last year I put $70,000 in Master
> Suite in April and $240,000 more in Aug-total $310,00.I ended the year
with
> a $170,000 Master Suite profit less $20,000 costs and losses with other
> system teting.
> >
> >This year I was up as much as $160,000 in the first quarter and am
holding
> steady at $35,000 at this point.I hate the pain but I also have 10 years
of
> data whereby recovery from sub-par quarters has been impressive.My other
> trading systems are profitable but not as significant in dollars yet
> because less money is allocated at this time. <<<
>
>
> Before anyone gets too excited by these results, read below the two
notices
> I pulled off the CFTC website regarding R&W Technical Services, Master
> Suite, and system fraud. Forewarned is forearmed...
>
> -Tony Haas (not a fan of the CFTC, but the facts speak for themselves)
>
>
> Release: #0002-97
>
> For Release: December 4, 1997
>
> CFTC ALJ FINDS R&W TECHNICAL SERVICES, LTD., GREGORY M. REAGAN AND
MARSHALL
> L. WORSHAM VIOLATED ANTI-FRAUD, REGISTRATION AND RECORDKEEPING PROVISIONS
OF
> THE COMMODITY EXCHANGE ACT IN CONNECTION WITH SALES OF COMPUTERIZED
TRADING
> SYSTEMS
>
> Judge Issues Cease And Desist Orders, A Permanent Trading Prohibition And
> Imposes Civil Monetary Penalties of $7,125,000
>
> Washington -- In an Initial Decision issued on December 1, 1997,
Commodity
> Futures Trading Commission Administrative Law Judge Bruce C. Levine found
> that R&W Technical Services Ltd. (R&W), a seller of computerized
commodity
> futures trading systems based in Houston, Texas, and its principals
Gregory
> M. Reagan of Sugarland, Texas, and the late Marshall L. Worsham of
Houston,
> Texas, engaged in fraudulent solicitation and false advertising, acted as
> commodity trading advisors (CTAs) without the required registration, and
> failed to produce required books and records to Commission
representatives.
> The ALJ also found that Reagan and Worsham were liable for R&W's
violations
> as controlling persons of the firm and that they willfully aided and
abetted
> R&W's violations. The ALJ ordered R&W and Reagan to cease and desist from
> further violations of the Act and Regulations, permanently prohibited R&W
> and Reagan from trading commodity futures and ordered R&W and Reagan
jointly
> and severally to pay a civil monetary penalty of $7,125,000.
>
> Describing the matter as "a story of high-tech charlatanism," the ALJ
found
> that the respondents' representations that their trading systems had been
> proven by "extensive systematic actual trading," were false, and "at
best,
> the trades occurred in cyberspace, and at worse, were nothing more than
the
> product of respondents' imagination." The ALJ concluded that in making
such
> unsupported trading claims the respondents "defrauded their customers."
The
> ALJ also found that the respondents "undertook an advertising and
> promotional campaign characterized by fantastic claims of profitability
and
> blatant falsehoods concerning their trading experience."
>
> The Judge also concluded that respondents violated the statutory
requirement
> that CTAs be registered. He found that "[r]espondents' sale of computer
> trading programs" met the statutory definition "precisely" and that he
was
> bound by previous Commission precedent to turn aside respondents' claims
> that their activity fell within a statutory exclusion and that the
> application of the CEA to their activities violated the First Amendment.
>
> The Commission's four-count administrative complaint, Docket No. 96-3,
was
> filed on March 19, 1996, and a hearing was held on August 13, 1997. (See
> CFTC News Release #3996-95, March 20, 1996.)
>
> The parties have 15 days from the entry of the ALJ's order to file an
appeal
> with the Commission. If the decision is appealed, or if the Commission
> chooses to review the decision on its own initiative, the decision does
not
> become final and the sanctions do not take effect pending the outcome of
the
> Commission's review.
>
> Release:#3996-95
>
>
>
> For Release:March 20, 1996
>
> CFTC FILES ENFORCEMENT ACTION ALLEGING FRAUD AGAINST
> R&W TECHNICAL SERVICES LTD. AND TWO INDIVIDUALS, ALL OF TEXAS
>
> CFTC Charges the Respondents with Fraudulently Soliciting Customers in
> Connection with the Sale of their Commodity Futures Trading System, and
> Operating as Unregistered CTAs, Among other Charges
>
> WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
> today that on March 19, 1996, it filed a four-count administrative
complaint
> against R&W Technical Services, Ltd., of Houston, Texas, a limited
liability
> company that sells computerized commodity futures trading systems, and
two
> individuals: Gregory M. Reagan, of Sugarland, Texas; and Marshall L.
> Worsham, of Houston. None of the defendants has ever been registered with
> the CFTC.
>
> The complaint charges the respondents with committing fraud in connection
> with their solicitation of individuals to purchase futures trading
systems,
> including the CurrencyMaster and the Master Suite systems. The basic
> CurrencyMaster trading system sold for $3,495, and the Master Suite
trading
> system sells for approximately $13,500. Both systems are advertised to
give
> trading signals in various financial futures contracts. The respondents
are
> also charged with acting as commodity trading advisors (CTAs) without
being
> registered with the CFTC, fraudulent advertising, and failure to produce
> required books and records, all violations of the Commodity Exchange Act
and
> CFTC regulations.
>
> According to the complaint, since at least April 1993, R&W has been
> soliciting customers to purchase its trading systems using a variety of
> misrepresentations and omissions of material fact in their advertisements
> and promotional materials. For example, the solicitations allegedly
> presented to potential investors include a track record of trading
profits
> of $583,350 that purportedly resulted from the use of the Master Suite
> trading system for seven years. Solicitations also claimed, the complaint
> alleges, that the CurrencyMaster system generates 323 percent net profits
> trading just one contract at a time and consistently generated
triple-digit
> profits, year in and year out, for six years from 1987 to 1992.
>
> Contrary to respondents' representations regarding the success rate of
their
> trading systems, the complaint alleges that the representations of profit
> were not based on any real trading by the respondents, that the
respondents
> had not actually made the represented profits from the trading system,
and
> that R&W has never had an account to trade commodity futures.
>
> A public hearing is to be held to determine whether the allegations are
true
> and, if so, what sanctions, if any, should be imposed. Possible CFTC
> sanctions include: civil penalties of up to $100,000 or triple the
monetary
> gain against each respondent for each such violation; trading
prohibitions;
> restitution to customers; and cease and desist orders.
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