For people looking to get a foothold financially, promises of $100,000 or more in “verified profits” in “less than 45 days” are understandably enticing. But too often, what starts out as a siren song ends up as a swan song, as people lose their life savings to promoters of bogus schemes. The FTC announced a $3 million settlement with a company known as Warrior Trading and its CEO Ross Cameron for using allegedly misleading investment claims to convince consumers to shell out hundreds or even thousands of dollars for a trading “system” that left most of them on the financial rocks.
Massachusetts-based Warrior Trading touted its programs as “a quick and easy way to achieve your dream of day-trading success.” The defendants weren’t talking about a bit of pocket money on the side. Consider the type of claims they made on their website:
- “Find out how I made over $101,280.47 part-time trading with verified profits in less than 45 days using 3 simple strategies you can use immediately to increase profits and reduce losses NOW!”
- “Start trading over my shoulder side by side with me because I guarantee you that next week, week after, week after, I will be trading one or two stocks every day that go up 20 to 30 %. ”
Warrior Trading first directed consumers to a “FREE Day Trading Webinar,” but the FTC says that’s where all semblance of “free” ended. Then comes the spiel to shell out money for more “programs” that are supposed to teach people how to “easily find the right stocks to trade” so they can “produce big winners.” According to the complaint, it was fantasy, but here are the facts. The FTC says most of the client accounts actually lost money, meaning people took a financial hit on both the defendants’ “programs” and their business losses.
the complaint accuses Warrior Trading and Cameron of violations of the FTC law and the Telemarketing Sales Rule. In addition to the injunctive provisions, the settlement will return $3 million to consumers who lost money due to defendants’ deception.
The case serves as reminder to future entrepreneurs about the risks posed by fast-talking, fast-earning people who use misleading tax returns to sell their investment “systems.”
This is also an opportunity to update sponsors on recent initiatives related to for-profit claims. In addition to law enforcement actions challenging misleading tax returns, the FTC sent Notice of criminal offenses to 1,100 companies, letting them know that future misrepresentations could lead to heavy financial penalties. The FTC also announced a Advance notice of regulatory proposal regarding false, misleading and unsubstantiated tax returns.