PureBytes Links
Trading Reference Links
|
CFTC FILES COMPLAINT AGAINST KENT C. CALHOUN OF HUNT, TEXAS, ALLEGING THAT HE
COMMITTED FRAUD IN USING THE CFTC's NAME TO SOLICIT CUSTOMERS TO PURCHASE HIS
COMMODITY TRADING SYSTEMS AND ATTEND HIS COMMODITY TRADING SEMINARS
CFTC Seeks Injunctive and Other Equitable Relief, Including Disgorgement of
Ill-Gotten Gains, Restitution to Defrauded Customers, and Civil Monetary
Penalties
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced the
filing of a four-count civil injunctive complaint against Kent C. Calhoun of
Hunt, Texas, alleging that Calhoun committed fraud by, among other things,
implying in his solicitations to customers that the CFTC has in some manner
recommended or approved him as a commodity trading advisor (CTA) or otherwise
passed on his abilities or qualifications as a CTA. Calhoun has not been
registered with the CFTC in any capacity since July 1983, when he was
registered as a CTA.
Specifically, the complaint, filed in the U.S. District Court for the Western
District of Texas, San Antonio Division, on June 29, 1999, alleges that from
at least June 1995 to the present, Calhoun, individually, as an agent of, or
doing business as KCI seminars, solicited customers to purchase his commodity
trading systems and attend his KCI commodity trading seminars through
national advertisements that included false and misleading statements
representing or implying that the CFTC has documented, verified, or otherwise
passed upon the success of his KCI trading systems and/or the accuracy of his
advertisements for such trading systems.
The CFTC civil complaint further alleges that by making those false and
misleading statements and other misrepresentations, and by failing to
disclose material facts, Calhoun violated the CEA's anti-fraud provisions
(sections 4b(a)(i) and 4o) and CFTC regulations 4.16 and 4.41. Commission
regulation 4.16 specifically prohibits CTAs from representing or implying
that the CFTC has recommended or approved them or otherwise passed upon their
abilities or qualifications as CTAs.
Furthermore, the complaint alleges that Calhoun placed advertisements that
would lead a reasonable person to believe, among other things, that:
-- Calhoun had "legally documented" or substantiated to the CFTC or a federal
district court that he is the most accurate time and price projection
technical analyst who has ever lived, when, in fact, he had not done so;
-- Calhoun’s advertisements included facts about, among other things, the
success and profitability of his commodity trading systems, the accuracy of
which was either documented or verified by the CFTC, when they were not;
-- The CFTC had verified the profitability of individuals who allegedly used
Calhoun’s systems to trade commodity futures, when it did not;
-- The CFTC had documented, verified, validated, or substantiated the
truthfulness of Calhoun’s advertisements, the expenditures Calhoun allegedly
incurred in testing and/or developing his commodity trading systems, or the
authenticity of Calhoun’s guarantee or refund policy, when it had not; and
-- The CFTC otherwise passed upon Calhoun’s trading advice, trading systems,
or advertisements and/or recommended or approved Calhoun or otherwise passed
upon his abilities and qualifications as a CTA, when it had not.
The CFTC is seeking preliminary and permanent injunctions to prevent Calhoun
from further violating the CEA and CFTC regulations, an accounting,
disgorgement of ill-gotten gains, restitution to defrauded customers, and
civil monetary penalties of not more than $100,000 per violation or triple
the monetary gain to Calhoun for each violation of the CEA committed prior to
November 27, 1996, or $110,000 or triple the monetary gain for each violation
committed after that date.
|