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WORLD INVESTOR WEEK

World Investor Week is a global campaign promoted by the International Organization of Securities Commissions (IOSCO) to raise awareness about the importance of investor education and protection. During October 2-8, 2017, individual investors, investment professionals, teachers, parents, researchers, and other interested individuals, firms, regulators, and organizations are encouraged to make a special effort to promote investor education and, in particular, World Investor Week’s key messages.

On Thursday, October 5, NFA will conduct a free webinar entitled, Investor protection: A worldwide impact starts with you, at 11:00 a.m. C.T./12:00 p.m. E.T. The webinar, which includes presentations by the U.S. Commodity Futures Trading Commission (CFTC), Office of Customer Education and Outreach, the U.S. Securities and Exchange Commission (SEC), Office of Investor Education and Advocacy, and the FINRA Investor Education Foundation, will educate investors on the key messages of WIW, which include:

  • Verifying investment professionals are licensed;
  • Conducting research on products before investing;
  • Understanding the risks that exist in all investments; and
  • Avoiding “get rich quick” and “can’t lose” schemes.

If you have not yet registered but plan to attend, please find attached a link for the event register for the webinar.

Once you are registered, you will receive an email containing all access information, including the website for the webinar and information on system requirements.

ANOTHER ICO SCHEME

The Securities and Exchange Commission charged a businessman and two companies with defrauding investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds.

The SEC alleges that the defendants and his companies have been selling unregistered securities, and the digital tokens or coins being peddled don’t really exist. According to the SEC’s complaint, investors in REcoin Group Foundation and DRC World (also known as Diamond Reserve Club) have been told they can expect sizeable returns from the companies’ operations when neither has any real operations.

“Investors should be wary of companies touting ICOs as a way to generate outsized returns,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “As alleged in our complaint, Zaslavskiy lured investors with false promises of sizeable returns from novel technology.”

Please find attached a link for the full story ANOTHER ICO SCHEME

Another Pump-and-Dump Market Manipulation Scheme

SEC Charges Microcap Company and its Promoters in Pump-and-Dump Market Manipulation Scheme.

According to the complaint, the defendants opened brokerage accounts in the names of nominees in order to sell their stock and, when they deposited the Company’s shares into the accounts, they lied about how much stock they owned, how they obtained it, and the relationship of the nominees to them. The complaint further alleges that the defendants organized and implemented a promotional campaign, including email blasts and a boiler room that targeted senior citizens. The Company’s stock price increased, from $0.93 per share on September 30, 2014 to $1.62 per share on May 1, 2015, during which time the defendants dumped their shares through the nominees, earning them net illegal profits of about $3.1 million.

Please find attached a link for the full story Pump-and-Dump Market Manipulation Scheme

The Most Frequent Advertising Rule Compliance Issues Identified

Below are the most frequent deficiencies that OCIE staff has identified in connection with failure to comply with the Advertising Rule:

  • Misleading Performance Results
  • Misleading One-on-One Presentations (did not disclose that the advertised performance results, did not reflect the deduction of advisory fees, and that client returns would be reduced by such fees and other expenses)
  • Misleading Claim of Compliance with Voluntary Performance Standards
  • Cherry-Picked Profitable Stock Selections
  • Misleading Selection of Recommendations

Please find attached a link for the full report Misleading Advertisements

Please be aware, and be skeptical about marketing materials.

 

NFA orders Chicago, Ill., introducing broker Kingsview Futures LLC to pay a $50,000 fine

You are invited to read the complete text of the Complaint, it may assist you. Here is a brief:

  • Kingsview Futures obtained virtually all of the self-directed accounts from customer leads generated by Trading Advantage LLC (Trading Advantage).
  • Trading Advantage is a non-NFA Member trading education firm. The firm provides clients with live online courses and in-person seminars. In Trading Advantage’s courses, individuals act as “mentors” and “coaches” and instruct student attendees on how to understand charts and market information, develop trading strategies, and identify/manage trading signals. Trading Advantage has situated its investment school” in offices directly across the hall from Kingsview Futures’ Chicago office.
  • Trading Advantage promotional materials tout the “secrets of trading” and “successful methods” which Trading Advantage claims are needed to “make a fortune” in the markets.
  • Most of the customers who opened self-directed accounts with Kingsview Futures were current or prior Trading Advantage students who Trading Advantage referred to Kingsview Futures.
  • Kingsview Futures was fully aware that the customers who were referred to it by Trading Advantage had been exposed to deceptive and misleading promotional material touting Trading Advantage’s classes and seminars and the dramatic profit potential of trading futures.
  • Kingsview Futures charged minimal commissions (e.g., $1 to $2 per round-turn) to customers with self-directed accounts. However, these customers – while students of Trading Advantage – paid thousands of dollars to Trading Advantage to learn the supposed “secrets of a successful trader.”
  • For example, Customer A was as a self-employed handy man with annual income ranging from $25,000 to $50,000 and a liquid net worth of $50,000. Customer A was a Trading Advantage student for about one year and paid approximately $65,000 for classes and in-person seminars. Yet, Customer A found actual trading to be more difficult than he had expected and he was unsure if he was fit to trade on his own. Customer A lost $18,000 through his trading account at Kingsview Futures and paid commission charges of almost $1,600.
  • Another customer, Customer B, purchased a three-month Trading Advantage membership for $3,000 and later bought a lifetime membership for an additional $3,000 fee. while Customer B was a Trading Advantage student, he opened a trading account introduced by Kingsview Futures.
  • Customer B originally thought that Trading Advantage and Kingsview Futures were one and the same firm based on the fact that the person who contacted him from Kingsview Futures was also present on the premises of Trading Advantage and was designated as a Trading Advantage staff member.
  • While a student at Trading Advantage, Customer B attended webinars and live online trading classes which involved watching a Trading Advantage instructor make trades based on entrance and exit signals. The instructor encouraged students to make trades following the same signals and suggested that, if they followed the same signals, they too could be successful traders. The instructor often boasted about being a successful trader and claimed to have only had a few losing months in his almost eight years of trading.
  • Customer B received e-mails from Trading Advantage that suggested that students could make substantial amounts of money through trading and would not need to work a normal job. Many of these e-mails included the following or similar claims:
    • Ever wonder about that “mysterious” neighbor of yours? You know, the guy you constantly see hauling golf clubs into the trunk of his red Porsche convertible? The guy that controls his own destiny? Such is the life of a proprietary trader…If you think this is the type of lifestyle that you might enjoy, I have great news for you…ANYONE can become a “prop” trader…
    • “lf you want to accelerate your path to a career that can provide for your family, has unlimited earning potential and the best hours in the world…”
    • “lf you desire unlimited earning potential, a very flexible work schedule and peace of mind from controlling your own destiny – then it’s time to take the bull by the horns and join us tomorrow.”
  • The e-mails included a risk disclaimer at the end of each message. However, the disclaimer’s smaller font size and location at the end of the e-mails, along with the e-mails’ prominent discussion of profit potential and successful trading, weakened, if not totally neutralized, the effect of the disclaimer.
  • Trading Advantage also maintained a website, whose home page proclaimed, “WHERE TRADERS COME TO LEARN FROM THE BEST” and stated, “The Trading Advantage Online Campus sets you up for success with online trading resources and real-time coaching from some of the toughest, most successful traders in the world.”
  • Another page on the website contained the heading “CHECK OUT OUR STATS” followed by, “Our mentors have some pretty impressive numbers, take a look.” on this and the following page, Trading Advantage advertised year-to-date hypothetical trading profits, ranging from 94,778 to $21,421, which five of its “mentors” supposedly achieved in the first nine months of 2015.
  • The website contained statements at the end of the “trading stats” section, which indicated that the results represented hypothetical signals and that past performance is not indicative of future results. However, these statements were in a smaller font size, were not prominently displayed, and failed to discuss all
    the assumptions made in preparing the hypothetical results. Further, even though Trading Advantage claimed that its “mentors” were some of the “most successful traders in the world”, the “trading stats” section of Trading Advantage’s website did not include the actual trading results of these mentors but instead used hypothetical trading results.
  • Trading Advantage made YouTube videos available on or through its website. While some videos consisted of market commentary, other videos solicited viewers to join and become “successful” traders. In a video entitled, “The Secrets of Successful Trading,” the instructor claimed the “secrets” he learned from other traders made him successful and that his experiences taught him “a lot of valuable lessons” that enabled him “to live the life of [his] dreams.”
  • Throughout the video, instructor made numerous statements referencing wealth and profitability and claimed successful traders live a life of luxury and fly to Las Vegas on the weekends in private jets. The video talked about and included pictures of mansions, yachts and Ferraris. The instructor claimed he would show the viewer how to “follow in [his] footsteps” and said that to be successful in the futures industry “it’s gonna take decisive action on your part and, if you do it, the payoff could be huge.”
  • At the end of the video, The instructor stood in a trading jacket in front of a luxury car, saying he would give the viewer “all of my knowledge, all of my trading tools, everything I have” to help the viewer become a better trader. He concluded by saying, “now is the time for you to join up, join my team,” followed by a screen displaying a quote from Warren Buffet that stated, “l always knew I was going to be rich…” with the telephone number and website address for Trading Advantage posted directly below the quote. The video also displayed other third-party quotes that publicized wealth and success.
  • Trading Advantage included risk of loss disclaimers at the beginning and end of the video. However, the disclaimers were in small-font and appeared only briefly on the screen, and did not come close to balancing the references contained throughout the video regarding the potential profits and success someone could achieve by joining the team at Trading Advantage to learn the “secrets” and knowledge to be a “successful trader.”
  • Trading Advantage also posted testimonials on its website. One testimonial located on the home page and in the “Member Testimonials” section of the website featured Kingsview Futures customer, Customer C. The testimonial shows customer C on a golf course and has him making the following statements, “enjoy the ride – make some money and move on;” trading is “a great way to create the opportunity to have another line of income in your life or to be just great wealth for yourself; “and I am going to start trading for my retired parents as my father is “looking for another line of revenue.”
  • The end of the video testimonial included a notice indicating, among other things,
    that testimonials are believed to be true, but the facts have not been independently audited or verified and that the author of the testimonial was not compensated. However, the video’s overall suggestion of Customer C’s trading success – coupled with the notice’s smaller font size and proximity to the video’s end – minimized the effect of the notice.
  • In his testimonial, Customer C specifically claimed, “I’ve been with Trading Advantage for four years. I’m doing well this year. I’ve made money every single month except for one…” However, at the time the video was posted to YouTube in August 2013, Customer C’s account with Kingsview Futures had only been trading since December 2012 and during this approximate nine-month period, Customer C lost over $8,000 and incurred losses in seven of those months. Customer C’s losses continued through June 2016 totaling more than $40,000.
  • Since Customer C’s trading results conflicted with his testimonial claims, NFA analyzed the overall performance for calendar years 2014 and 2015 of Kingsview Futures’ other self-directed accounts whose account holders had also been Trading Advantage students.
  • 235 Kingsview Futures customers with self-directed accounts traded in 2014. 226 of these customers (or 96%) incurred total losses of more than $1.5 million. Approximately 70% of the customers experienced losses exceeding $1,000; four customers experienced losses exceeding $20,000; and one customer experienced losses exceeding $70,000. In contrast, only nine customers earned profits, with total gains of approximately $43,000. During the same period, Kingsview Futures made almost $257,000 in commissions on these accounts.
  • 217 Kingsview Futures customers with self-directed accounts traded in 2015. 203 of these customers (or 94%) incurred total losses that exceeded $1.9 million. More than 70% of the customers experienced losses exceeding $1,000, and approximately 10% of them experienced losses exceeding $20,000. One customer’s losses exceeded $225,000. In contrast, thirteen customers reported gains in 2015, and only three of them had net profits exceeding $1,000. During the same period, Kingsview Futures made commissions totaling more than $208,000 from these customers.

Please find attached a link for the full Complaint and the NFA Decision

 

 

Charges from the SEC

Please find below 2 charges from the SEC:

  1. The Securities and Exchange Commission announced that it has charged a former financial adviser with defrauding investors and spending their money on herself and to make Ponzi-like payments to earlier investors in the alleged scheme.
    Please find attached a link for the full story Former Financial Adviser Charged With Defrauding Investors
  2. The Securities and Exchange Commission charged a sports radio personality and another New York City man with stealing millions of dollars from investors who were allegedly promised their funds would be used for the purchase and resale of concert tickets.
    Please find attached a link for the full story Radio Host Charged With Concert Ticket Investment Scam

UPCOMING EVENTS

The TradersEXPO Las Vegas, November 2 – 4, 2017 (MoneyShow) – please find attached a link to the event Las Vegas

FinanceFeeds Sydney Australia, 6pm, Thursday, November 2, 2017 – Please attached a link to the event FinanceFeeds Sydney Australia

Finance Magnates London, November 14-15th – please find attached a link to the event Finance Magnates London

iGB Affiliate & CONVERSION PROS Berlin, November 1 – 4, 2017 – please find attached a link to the event iGB Affiliate & CONVERSION PROS Berlin2017

The U.S. Commodity Futures Trading Commission (CFTC) latest charges

Please find below the latest charges:

  1. CFTC Charges Monex Deposit Company, its Affiliates, and their Principals in Multi-Million Dollar Fraudulent Precious Metals Scheme.
    CFTC alleges that defendants deceived thousands of retail customers who lost hundreds of millions of dollars in connection with illegal, off-exchange leveraged precious metals transactions.
    Please find attached a link for the full story Monex Multi-Million Dollar Fraudulent Precious Metals Scheme
  2. CFTC Charges South Carolina Resident Thomas Lanzana, Florida Resident Nikolay Masanko, and Their Companies Blackbox Pulse, LLC and White Cloud Mountain, LLC with Fraud, Misappropriation, and Registration Violations.
    Lanzana and Masanko Allegedly Operated a Ponzi Scheme that Defrauded Off-Exchange Foreign Currency Derivatives Customers of at Least $700,000.
    Please find attached a link for the full story Lanzana and Masanko Ponzi Scheme that Defrauded Off-Exchange Foreign Currency Derivatives Customers