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CFTC vs. Kent Calhoun



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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.