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THE DOCTOR wrote:
>
> The defendents lost in the SEC case. See Leeb vs the SEC. They settled
> with admitting guilt,,but paid $500,000 fine. I consider that losing.
> I'm not certain if it is the same case you view as the test case, but
> this is the one the industry and press watched the most closely. The
> defense was the that the 1st amendment didn't apply.
>
> The CFTC case against Leeb is still pending and the states are still
> active with their claims. The general view is that it will cost a few
> million more to settle. If that's winning handily I'd hate to lose.
I have to stop sending e mail from airplanes.
My post should have said "without admitting guilt", however when they
settled they agreed to refrain from the alledged activity in the future.
Essentially in Leeb vs the SEC the case was based on a newsletter(mail,
fax and internet)and their claims relating to performance of their S & P
timing service. The reason they were a "test" case was that in addition
to thir newsletter they also manage money and run a small mutual fund.
The basis for the complaint was that investors did not earn the rate of
return claimed in the newsletter. Investors who complained alledged
that the r of r of the accounts was nowhere near what was claimed in
the newsletter and held the newsletter out as "advertising" for the
managed money business. The defense alledged that the newsleter(fax,
mail and internet)was protected by the 1st amendment and not subject to
the act of 34(securities). This was the first of a number of pending
cases. The CFTC was still taking depositions as of a few months ago so
I doubt there will be any resoltion shortly. I'm not very well versed
on the CFTC side(I work for CBOE so I live on the securities side of the
world), but from what i hear the CFTC has for first time become the big
ugly dog in these issues and are making every effort to have people
register as advisors. From what I've heard this attempt has been
successful in both gaining registrations and driving the bad guys out,
but I'll emphasize that on the CFTC side this is what I've heard.
This is also an old "dead horse" topic as far as I'm concerned so I
depart from the discussion here.
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