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http://www.cftc.gov/opa/adv00/wa36-00.htm
CFTC News Release 4442-00
For Release September 7, 2000
CFTC FILES FIVE ENFORCEMENT ACTIONS ALLEGING THE FRAUDULENT PROMOTION OF
COMMODITY TRADING SYSTEMS OVER THE INTERNET
CFTC Actions Are Part of Initiative To Clean Up Fraudulent Internet Web
Sites
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
today that it has filed five enforcement actions against promoters of
commodity trading systems using the Internet. In four of the actions, the
CFTC issued orders simultaneously settling the proceedings against
respondents. In the fifth action, the CFTC filed a two-count civil complaint
in the United States District Court for the Northern District of California,
seeking a statutory restraining order and preliminary and permanent
injunctive relief against Abdullah Alsafari. In each of these actions, the
CFTC finds, or alleges, that the promoters of commodity trading systems made
fraudulent claims on the Internet concerning the extraordinary profits to be
realized by using their systems to trade commodity futures contracts or
options.
The CFTC's announcement today is part of a continuing law enforcement
initiative announced by the Commission on May 1, 2000, directed at cleaning
up internet Web sites that fraudulently promote commodity trading systems
and advisory services. In the first phase of the initiative, the Commission
issued orders filing and simultaneously settling ten administrative
proceedings against respondents for the fraudulent promotion of their
trading systems. The Commission also issued a CFTC Consumer Advisory (see
www.cftc.gov/opa/alerts.htm and
http://www.cftc.gov/enf/00orders/posting4-tradingsystem.htm) warning the
public about false and misleading claims on Web sites touting outstanding
performance with little risk if a customer used the advertised trading
systems or advisory services. (Also see CFTC Press Release 4397-00, May 1,
2000, http://www.cftc.gov/opa/enf 00/4397-00.htm.)
In commenting on today's enforcement actions, CFTC Chairman, William J.
Rainer, said:
Through this second phase of the CFTC's law enforcement initiative, the
Commission seeks to reinforce the message that the investing public must be
skeptical of claims of easy profits at low risk by using these trading
systems to buy commodity futures and options contracts. Sellers of such
systems should also be on notice that the CFTC will continue to take
vigorous action to clean-up Web sites that use the internet to fraudulently
solicit customers.
CFTC Issues Orders Simultaneously Settling Four Of The Five Enforcement
Actions Filed Today
In the four actions that the CFTC simultaneously filed and settled, the
Commission issued orders finding that the respondents each fraudulently
marketed commodity trading systems by misrepresenting the profits they had
achieved, or profits one could expect to achieve, by using their systems.
According to the orders, some of the respondents claimed that they
personally profited by trading using their systems when in fact they either
never traded or lost money trading; other respondents claimed that customers
had exceptional profits when in fact the customers had not made such profits
or had lost money using the trading systems; one respondent used a customer
testimonial claiming highly successful trading but never disclosed the
customer's subsequent substantial losses and that the customer discontinued
using the respondent's system; some respondents also did not make adequate
risk disclosures; finally some respondents presented profitable hypothetical
trades as actual trades and did not include the required disclaimer
concerning the limitations of hypothetical trading. Respondents neither
admitted nor denied the findings entered by the CFTC.
The following respondents and their Web sites were the subjects of the CFTC
orders: Stanley Edward Moore, of Reno, Nevada; Richard Swannell of Attadale,
Australia, International Trading Systems, Ltd. (a Grand Caymans
corporation), International Trading Systems Australia PTY, Ltd. (an
Australian corporation); Edward Martin (doing business as Black Gold
International) of Terre Hill, Pennsylvania; and George Heffernan (doing
business as Accutrader and Accutrader Day Trading School) of Evans, Georgia.
Moore has been registered with the CFTC as a commodity trading advisor (CTA)
since April 1996; none of the other respondents has ever been registered
with the CFTC in any capacity.
Firm or Individual Internet Web Site Address
Stanley Edward Moore www.rhythmofthemarkets.com
Richard Swannell, International Trading
Systems Ltd., International Trading Systems Australia PTY Ltd.
www.internationaltrading.com
Edward Martin d/b/a Black Gold International www.b-gold.com
George Heffernan d/b/a Accutrader and Accutrader Day Trading School
www.accutrader.com
The four CFTC settlement orders require the above-named respondents 1) to
cease and desist from violating the provisions of the Commodity Exchange Act
(CEA) and the CFTC's regulations that the CFTC found they violated; 2) to,
among other things, make no unsubstantiated profit or risk claims; and 3) to
pay civil monetary penalties, unless respondents have demonstrated to the
Commission that they do not have the financial ability to pay such a
penalty. The order as to respondent Moore also suspends his registration
with the CFTC for a six-month period.
CFTC Civil Complaint Alleges That Abdullah Alsafari Committed Fraud on The
Internet By Misrepresenting the Profitability of His Japanese Yen Futures
Trading System
The CFTC also announced today the filing of a two-count civil complaint on
September 6, 2000, in the United States District Court of the Northern
District of California against Abdullah Alsafari, also known as Vincent,
Vincenta or Vicenta Alsafari, of Dale City, California, who does business on
the internet as www.yentrading.com.
The CFTC complaint alleges that Alsafari violated the anti-fraud provisions
of the CEA by fraudulently selling his Japanese yen futures trading system
via the Internet and through advertisements in newspapers and demonstrations
at local hotels.
Specifically, the CFTC complaint alleges that Alsafari defrauded customers
by guaranteeing profits from the use of his system and by guaranteeing
refunds, but failing to provide such refunds, to customers who did not make
money. As the complaint further alleges, Alsafari falsely represented that
he profitably trades foreign currency futures using his system and that no
customer has ever requested a refund. According to the complaint, Alsafari's
customers, each of whom paid $3,500 for the trading system, all lost money
trading with the system and all of them, with one exception, never received
the purchase price refund guaranteed by Alsafari.
In its continuing litigation, the CFTC intends to seek restraining orders
prohibiting Alsafari from destroying or altering his records and from
further violating the CEA. The CFTC is also seeking preliminary and
permanent injunctive relief, an accounting of all of Alsafari's assets and
liabilities together with all funds received from and paid out by him to
purchasers of his trading system, disgorgement of all ill-gotten gains,
restitution directing Alsafari to make whole each and every purchaser of his
trading system, and civil monetary penalties of up to $110,000 or triple the
monetary gain for each violation of the CEA.
NOTES TO EDITOR:
In addition to the CFTC's Consumer Advisory concerning the fraudulent
promotion of trading systems issued on May 1, 2000 (see Beware of Internet
Websites Selling Commodity Trading Systems that Guarantee High Profits with
Minimal Risks, http://www.cftc.gov/enf/00orders/posting4-tradingsystem.htm),
the Federal Trade Commission (FTC) and the Securities and Exchange
Commission (SEC) issued similar advisories (see
www.ftc.gov/bcp/menu-internet.htm and www.sec.gov/enforce/intrela.htm) .
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