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I suggest that you get a copy of the article in the Wall Street Journal regarding the CFTC action. Judge Levine said (in essence) that all technical analysis was useless and that it was a widely accepted fact by all who should know that no technical analysis can not help in buying and selling decisions and ANYONE who uses it and attempts
to advise anyone else is a FRAUD.
I will try to dig up the article and send it out to the list.
Manning Stoller
John Cappello wrote:
> RE Master Suite:
>
> My post in no way is meant to get anyone excited about Master Suite.It was merely to answer a question honestly and openly.I'll take the profits from this "fraudulent " system any day.My statements prove my experience and before I purchased the system I saw real time statements of people who had doubled their money on a regular basis.
>
> What R&W did was not right in giving the impression their hypothetical data could be construed as real time.But they were really fined beyond that for stating technical analysis works and the CF people say that it does not.
>
> There are always 2 sides to a story.
>
> Finally,I am not associated with R&W in any way.
>
> Constructively yours,
> John
>
> ------------------ Reply Separator --------------------
> Originally From: sptradr@xxxxxxxxx
> Subject: S&P 500 System Update #3
> Date: 05/13/98 11:54am
>
> 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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