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Bravo Mike. What a story!
I've been reading about Larry W. for some time without any of the important
details coming through. Enlightening. But I still like the guy, and I love
America.
-----Original Message-----
From: mike <combat@xxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Wednesday, April 07, 1999 9:47 PM
Subject: More On Larry Williams
>
>Dear Realtraders:
>
>I have read with great interest the various comments regarding Larry
>Williams, both positive and negative. I recommend that you read William
>Gallacher's "Winner Take All" for his comments regarding Larry
>Williams. They are as follows:
>
>"Another highly conspicuous promoter operating on the comic fringe of
>commodities is Larry (The Professor) Williams, who first surfaced in
>1974 with "How I Made A Million Dollars Trading Commodities Last Year."
>It is not clear what happened to his commodity trading thereafter, but
>in the late seventies, Williams was popping up at trading seminars and
>advertising heavily in the commodity press. His interests now seemed to
>lie in promoting rather than in trading ...
>
>"In 1987, Robbins Trading Company - a commodity futures brokerage firm -
>sponsored a trading contest titled, rather immodestly, The World Cup of
>Futures Trading. To enter this competition, a contestant had to open a
>$10,000 account with Robbins. The prize was to go to whoever made the
>most money during teh course of a year's trading. In other worlds, REAL
>MONEY would be traded.
>
>"The prize was incidental. The real attraction for any trader entering
>a trading contest is the exposure he or she will get from winning the
>contest, and the investment dollars such a victory will attract. The
>principal attraction for the brokerage firm sponsoring a trading contest
>is the expectation that the investment money pulled in by the publicity
>will be traded through that firm. One of the entrants to the contest
>was Larry Williams.
>
>"During the course of 1987, while the contest was still running, Robbins
>Trading Company began taking out full-page advertisements in Futures, a
>monthly magazine devoted to commodities trading. Understandably,
>Robbins wanted to capitalize on the publicity the contest was
>generating. "Managed Accounts by the World Cup Trading Team" proclaimed
>their ad copy, which showed a quartet of well-known commodity advisors,
>presumably the team in question. There were a number of problems with
>this solictation that would eventually land Robbins Trading Company in
>hot water with the NFA - an industry watchdog organization, one of whose
>mandates is to scrutinize promotional material put out by its members.
>
>"The first problem with the advertisement was that the World Cup of
>Futures Trading was billed as a contest for individuals, not teams, so
>that the concept of a World Cup Trading Team didn't make sense. Second,
>while the contest was still under way, Larry Williams, a contestant, was
>already identified as a member of this World Cup Trading Team. What
>could it mean? Was Williams' victory being taken for granted before the
>contest was half over? He certainly had got off to a flying start. In
>its May 1987 issues, Futures Magazine, the principal conduit for the
>advertising of the trading contest, informed its readers:
>
>>> First quarter results for the World Cup of Futures Trading, for
>example, are teh most spectacular in the event's five year history, says
>Joel Robbins, President of Robbins Trading Co., sponsor for the
>competition. Current leader Larry Williams began trading the initial
>$10,000 account in stock index and bond contracts in January, and had
>increased it to $200,000 by the end of March.<< (excerpt from the
>magazine)
>
>"Williams went on to make over $1 million by the end of the contest, and
>won it by a country mile, his nearest challenger amassing a "paltry"
>$40,000. As soon as the contest ended, Robbins Trading Co. took out
>more full-page advertisements in Futures, this time featuring Larry
>Williams' portrait, and with this solicitation to prospective investors:
>"Managed Account Trading utilizing Larry Williams' World Cup Approach To
>Futures Trading." Simultaneously, commercials saying the same thing hit
>the airwaves on FNN, the then Financial News Network.
>
>"The National Futures Association was not amused. There were some
>bothersome omissions in the disclosure statements supporting the
>solicitations, and on August 10, 1988, the NFA issued a formal complaint
>against both Robbins Trading Co. and Larry Williams. It seems the NFA
>had got wind of some odd discrepencies between Williams' personal
>trading performance and the performance enjoyed by his investors during
>the period the World Cup contest was running.
>
>"Commodity Trading Advisors (CTAs) registered with the NFA are obliged
>to disclose their actual trading records to the NFA when soliciting
>public funds through promotions. A large part of the NFA's complaint
>had to do with whether Williams ought to segregate the results of his
>personal trading from the results of the accounts he was handling for
>others. Williams claimed in his defense that the NFA's guidelines were
>not clear, and he may well have had a point. One disturbing fact,
>however, was not in dispute. During the first quarter of 1987, when his
>"contest" account was appreciating from $10,000 to $200,000, Williams'
>managed accounts were losing and losing big. From the Findings and
>Conclusions of the NFA:
>
>>>There is no question that Mr. William's personal trading accounts had
>a material effect upon his composite trading performance. The record
>reflects that for the first quarter of 1987, Mr. William's composite
>performance showed a loss of $6,122,281, while at the same time, Mr.
>William's personal account experienced a gain of $902,599. The Panel
>finds the fact that Mr. Williams was making significant gains while his
>managed customer accounts were suffering considerable losses would be
>amaterial fact which a potential customer would need to know in order to
>make a fully reasoned decision.<< (excerpt)
>
>"On December 19, 1989, the NFA imposed fines of $35,000 on both Williams
>and Robbins Trading Co. Both fines were appealed with some success. On
>June 8, 1990, Robbins Trading Co. consented to a finding that it had
>violated an NFA Compliance Rule governing risk disclosure in its
>promotional material and agreed to pay a reduced fine of $15,000. On
>the same date, the Appeals Committee agreed to make no findings against
>Mr. Williams, but imposed a $13,000 fine. With these minor slaps on the
>wrist, the affair seems to have rest - as far as the NFA was concerned.
>
>"The ongoing problems with the NFA did little to dampen the promotional
>hype surrounding Williams' World Cup Championship Victory. In July
>1988, the Larry Williams Financial Strategy Fund was launched, followed
>in March 1989 by the World Cup Championship Fund, managed by Larry
>Williams, Jake Bernstein and two other members of the self-proclaimed
>World Cup Trading Team.
>
>"In October, 1989, Futures magazine issued a terse announcement: the
>Larry Williams Financial Strategy Fund was no more. The heavyweight
>champion of futures trading, who had turned $10,000 into $1 million in
>1987 trading his own real money, had found the going tougher when it
>came to trading customers' real money. In fact, he had suffered one of
>the fastest knockouts in commodity fund history, losing more than 50% of
>his client's equity in barely one year. It was a virtuoso performance
>in consistency, with scarcely an uptick to interrupt a relentless string
>of losing months.
>
>"And what of the World Cup Championship Fund, launched with such
>ballyhoo in March, 1989? After scarcely more than a year had passed,
>this fund, too, had lost more than half of its original equity. In Mary
>1990, the bell tolled againand the World Cup Championship Fund slipped
>quietly beneath the waves to join its predecessor, Larry Williams
>Financial Strategy, on the ocean floor. No heralds marched. No horns
>sounded. No trumpets blared.
>
>"The silence was deafening."
>
>Sincerely,
>
>Michael Strupp, M.S.
>Financial Markets & Trading
>Illinois Institute of Technology
>
>
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