UNITED STATES OF AMERICA

Before the

COMMODITY FUTURES TRADING COMMISSION

________________________________________________
)
In the matter of: ) CFTC Docket No. 00-06
)

Currency Trading Systems

) COMPLAINT AND NOTICE

18101 Von Karman Avenue

) OF HEARING PURSUANT TO
Suite 350 ) SECTIONS 6(c) and 6(d), OF THE
Irvine, California, ) COMMODITY EXCHANGE ACT,
) AS AMENDED
Joyce Roeder a/k/a Joyce Valdez )
5395 Via Asturias )
Yorba Linda, California, )
)
Glenn Cybulski )
12 Roger Drive )
San Rafael, California, )
)

- and -

)
)
Michael Stewart )
28849 N. 46th Way )
Cave Creek, Arizona )
)

Respondents,

)
________________________________________________ )


The Commodity Futures Trading Commission ("Commission" or "CFTC") has received information from its staff which tends to show, and the Commission's Division of Enforcement ("Division") alleges that:

I.

SUMMARY

1. As more fully set forth below, the Respondents, Currency Trading Systems ("CTS"), Joyce Roeder a/k/a Joyce Valdez ("Roeder"), Glenn Cybulski ("Cybulski"), and Michael Stewart ("Stewart") (collectively, the "Respondents"), have engaged in acts and practices which constitute violations of Sections 4b(a)(i) and (iii) and 4o(1) of the Commodity Exchange Act ("Act"), 7 U.S.C. 6b(a)(i) and (iii) and 6o(1) (1994), and Section 4.41(a) of the CFTC's Regulations ("Regulations"), 17 C.F.R. 4.41(a) (1999). Additionally, CTS and Roeder have engaged in acts and practices which constitute violations of Section 4.41(b) of the CFTC's Regulations ("Regulations"), 17 C.F.R. 4.41(b) (1999). Moreover, Roeder has engaged in acts and practices which constitute violations of Section 4m(1) of the Act, 7 U.S.C. 6m(1) (1994) and Sections 4.31(a) and (b) of the Commission's Regulations 17 C.F.R. 4.31(a) and (b) (1999).

2. Except as otherwise stated, the activities described in this Complaint relate to events that occurred in relation to the trading of foreign currency futures on a CFTC designated contract market during the period of February 1997 through July 1998.

3. Specifically, the Respondents violated the applicable antifraud provisions of the Act by fraudulently inducing prospective "students" to pay CTS to attend CTS seminars and to purchase trading software from CTS, in order to trade exchange-traded commodity futures contracts. In mass circulation newspapers across the country, in the CTS voicemail message, in written and video promotional materials, on the CTS website, and in conversations and correspondence with students and prospective students, the Respondents consistently misrepresented the performance record and profitability of the CTS trading system, as well as the background of key CTS personnel. At the same time, the Respondents minimized to students and prospective students the risks in trading commodity futures.

4. The Respondents committed these fraudulent acts while acting as commodity trading advisors ("CTAs") by providing advice (a) in the CTS seminars; (b) in the CTS trading software; (c) on the CTS website; and (d) directly over the phone. Roeder also provided advice by managing at least four students' accounts.

II.

RESPONDENTS

5. Respondent CTS was an unregistered and unincorporated California company, which had a principal place of business, located at 18101 Von Karman Avenue, Suite 350, Irvine, California. At all times material to this Complaint, CTS transacted business nationally and in the Central District of California. CTS has never been registered with the Commission in any capacity.

6. Respondent Roeder, who resides at 5395 Via Asturias, Yorba Linda, California, was the principal of CTS. Roeder has never been registered with the CFTC.

7. Respondent Cybulski, who resides at 12 Roger Drive, San Rafael, California, was a CTS seminar trainer and seminar trainer supervisor. Cybulski has never been registered with the CFTC.

8. Respondent Stewart, who resides at 28849 N. 46th Way, Cave Creek, Arizona, was a CTS seminar trainer. Stewart has never been registered with the CFTC.

III.

FACTUAL BACKGROUND

A. Introduction

9. The acts and practices of CTS and Roeder occurred from February 1997 through July 1998; the acts and practices of Cybulski occurred from May 1997 through June 1998; and the acts and practices of Stewart occurred from November 1997 through June 1998.

10. During 1995-1996, John Sieberg ("Sieberg") developed a trading system to trade exchange-traded foreign currency futures contracts, consisting of various trading strategies designed to analyze and take advantage of market conditions and trends at different times during the day (the "System").

11. In or around October 1996, Roeder attended a seminar at which she was taught how to trade pursuant to the System.

12. Shortly thereafter, Roeder and Sieberg signed a licensing agreement which allowed Roeder to market and teach the System and which required Roeder to pay Sieberg a royalty for each student that attended a seminar. Roeder decided to market her business under the name "Currency Trading Systems."

13. In March 1997, Cybulski attended a CTS seminar taught by Roeder, and within approximately two months, Cybulski was employed at CTS as a seminar trainer. In late June or early July 1997, Stewart attended a CTS seminar. By November 1997, Stewart was employed at CTS as a seminar trainer.

14. Roeder, Cybulski, and Stewart each were individually responsible for CTS' activities within certain defined geographical regions. Each CTS trainer was responsible for soliciting prospective students by placing advertisements in local newspapers, and then distributing CTS promotional materials and directly soliciting, either in person or on the telephone, those persons who responded to the advertisements. Each trainer taught classes within his or her specified area, collecting the seminar fees from students, and handling student follow-up questions about operating the system. Each trainer also held free in-person demonstrations for prospective students of how the system worked. Roeder was primarily responsible for Southern California, Cybulski was responsible for Northern California and Colorado and Stewart was responsible for Arizona.

15. In June 1998, Cybulski and Stewart tried to take control of CTS from Roeder. When that failed, they formed a company, Currency Trading, LLC, similar to CTS, and tried to lure CTS students to the new company.

B. Respondents Acted as Commodity Trading Advisors

16. From February 1997 until July 1998, CTS held seminars to teach students how to trade exchange-traded foreign currency futures contracts pursuant to the System. As part of the seminar fee, students received computer software which allowed them to learn the System's trading strategies, monitor market conditions, and obtain precise buy and sell signals. During the seminar, students were given the names of one or more companies registered with the CFTC that accepted CTS student trading accounts and handled orders at a reduced commission rate.

17. The Respondents purported to provide post-seminar technical advice to their students. CTS students were encouraged to send e-mails or to call for technical support. Some students availed themselves of this option.

18. Roeder invited two or more students, whose trading had been unprofitable, to her office to watch her trade and receive personal hands-on trading advice.

19. Roeder exercised power of attorney over at least four commodity futures trading accounts, none of which was owned by relatives, friends or business acquaintances. One or more of these four accounts were opened as a result of Roeder's advertising of the CTS System.

C. Respondents' Solicitations were Fraudulent Advertising in Newspapers and on the Internet

20. From February 1997 until July 1998, the Respondents solicited members of the general public to pay to attend a CTS seminar. The Respondents' initial solicitation occurred in advertisements in major newspapers including, but not limited to, the San Francisco Chronicle, the Denver Post, the Sacramento Bee, the Orange County Register and the Arizona Republic, and on the CTS website.

21. All of the CTS newspaper advertisements were essentially the same, and included the following representation:

CURRENCY TRADING - Immed income! No selling, no exper. I average $500/4hrs per day at hm w/PC system 800-569-9497

22. The newspaper advertisements directed readers to call a 1-800 telephone number. Upon dialing the 1-800 number, a caller would hear a recorded message left by Roeder, which stated, in part:

[My] personal computer tells me precisely when to buy and sell, taking the guesswork out of currency trading, minimizing risk and maximizing our profit potential....Monthly, our programs average an 80 point gain. So, as a beginning student trading three contracts, your earnings would be around $3,000 per month. More advanced trading, ten contracts will earn over $10,000 per month....[We] limit our losses to approximately $300 per contract.

23. The Respondents had no basis for the representations concerning the profitability of trading pursuant to the System and the limitation of the risk of commodity futures trading.

24. After a prospective student left a telephone message, he or she received a call from Roeder, Cybulski, Stewart or another CTS employee, during which prospective students were given additional information regarding CTS, Roeder, the seminar and the System. The CTS employee would also arrange to send the prospective customer promotional literature and schedule an in-person demonstration of the System.

25. Additionally, the CTS website represented that:

By using the Currency Trading System an [sic] placing tight controls on your order, we have been able to average a gain of 5 to 10% each day (emphasis in original) on our capital account. Using CTS techniques and good risk management, your risk can be limited to $125 per contract in any given trade.

26. The website did not disclose that the purported 5-10% daily gain was not based on actual trading results, and further created the impression that the results were based on actual trading.

27. In addition, there is no basis for the representation that losses could be limited to $125 per contract and, in fact, many CTS students lost far more than $125 per contract during their trading.

28. The website included testimonials from students who had purportedly taken the CTS seminar, attesting to their success and the technical support that they had received from CTS. In fact, CTS students did not make the profits represented in the testimonials, and CTS and Roeder provided little personal support.

29. The website also contained a Frequently Asked Questions ("FAQ") section. In this section, CTS reiterated the ability of "its capital account to make a 5-10% (emphasis in original) return on investment" and the ability of its system to limit losses to $125 per contract on a trade, and stated that "working with the computer takes much of the financial risk out for currency traders." In fact, the Respondents had no basis for any of these representations -- the trading by CTS personnel and by CTS students consistently lost money.

30. The website also represented that CTS has "actively been trading using exact methods we teach since 1990." In fact, Sieberg did not develop the System until 1995-1996, and trading pursuant to the System did not occur at all until 1996.

Promotional Literature

31. The CTS promotional literature represented that CTS has "been actively trading using the exact methods we teach for over eight years" (emphasis in original). However, the System was not developed until 1995-1996.

32. The CTS promotional material represented that training students to trade the System had begun "for a few friends and relatives who became excited over the new lifestyle our business afforded us." In fact, Roeder lost money immediately and continually trading pursuant to the System, and trading pursuant to the System never afforded her, or anybody else at CTS, a new lifestyle.

33. The promotional literature also represented that the computerized System eliminated much of the financial risk (described in one version of the literature as limited to $125 per contract; in another version as $375 per contract), so that as long as traders followed the computerized signals, they would make money much more often than they would lose. The literature also claimed that the CTS account averaged a 5-10% return each day (emphasis added) trading pursuant to the System. In fact, as discussed above, any trading pursuant to the System lost money and the System had no ability to limit risk.

In-Person Demonstrations of the System

34. During the in-person demonstration, Roeder, Cybulski or Stewart would use a laptop computer to display both real time trading results and historical trades based on the System. The historical trades purported to show what the trading results for the System would have been had the CTS strategy been used given certain historical parameters. The real time trades purportedly were trades that a trainer had made within the previous few days. The prospective student would view the results of the purported real time trade. Prospective students were not told that these purported real time trades were, in reality, hypothetical trades.

The System's Trading Record

35. In all the various forms of CTS' solicitations, including the recorded message, the Internet, and promotional material, the Respondents made claims that trading pursuant to the System enabled CTS to amass substantial gains each day in their capital account. However, the solicitations failed to mention that the claims of an "80 point gain" (recorded message) and the 5-10% gain per day (Internet and promotional materials) were based on hypothetical trading and not actual trading results. In addition, these representations are misleading because the Respondents knew from their own trading that the System did not perform as advertised in actual trading.

Oral Misrepresentations by Respondents Concerning Purported Actual Trading Pursuant to the System

36. Respondents told prospective students that John Sieberg had tested and then traded pursuant to the System for a long time, variously represented as anywhere between eight and twenty years. However, Sieberg did not develop the System until 1995-1996, and never traded pursuant to the System until 1996.

37. Roeder claimed to the other Respondents, and Respondents represented to prospective students, that Roeder had been trading pursuant to the System for eight years. In fact, Roeder had been trading pursuant to the System for approximately one year at the time Respondents made this misrepresentation.

38. By at least January 1998, the Respondents knew that Roeder had been trading pursuant to the System for approximately one year rather than the eight years Respondents had previously represented to prospective students and that Sieberg also had been trading pursuant to the System for approximately one year rather then the eight to twenty years Respondents had previously represented to prospective students. Nevertheless, Respondents continued to disseminate false information to prospective students concerning the trading history of both Sieberg and Roeder.

Concerning Roeder's Background and Trading Record

39. Roeder misrepresented her prior employment history to prospective students. She claimed that she had been an executive with Chicago Title Company ("Chicago Title"), and that she had left that position, despite the fact that she was making a six-figure salary, because she had become so profitable trading foreign currency futures pursuant to the System. She further represented that she was able to trade for half a day and make as much money in a year as she had at Chicago Title in a year.

40. In fact, Roeder is a convicted felon who was fired by Chicago Title when it learned that Roeder had stolen more than $63,000 by falsifying expense account statements. In May 1997, Chicago Title obtained a judgment against Roeder for more than $250,000 in actual losses and punitive damages.

41. Roeder repeatedly claimed during her solicitations of prospective students and while teaching, or appearing at, CTS seminars, that she had made large profits trading pursuant to the CTS System. Roeder also represented that she was an advanced trader and consistently traded ten to twenty contracts per trade. In fact, Roeder never made large profits trading pursuant to the System and rarely traded the level of contracts that she claimed to be trading.

In the spring of 1998, Roeder gave an in-person demonstration to two students to show them how the System worked in real market conditions. During that demonstration, Roeder used her computer purportedly to make and then liquidate a trade that purportedly resulted in profits in excess of $10,000. The demonstration appeared to show the specific trades she placed and the specific times that she bought and sold her contracts. In fact, Roeder never made any such trade and never made a profit in excess of $10,000 at any time on any trade. During the 22 months that Roeder had a commodity futures trading account, she lost $40,792.68 trading foreign currency futures contracts.

Concerning Cybulski's Background and Trading Record

42. Cybulski acted as a reference for Roeder in connection with her solicitation of prospective students. When such prospective students called Cybulski, he represented to them that he was a successful and profitable trader.

43. During Cybulski's solicitations of prospective students, he represented that he was a "successful" trader who (1) was able to give up his construction business because of his profitable trading pursuant to the System; (2) bought a car for his mother from the profits from his first two months of trading; and (3) was able to buy a $450,000 house in Lake Tahoe, Nevada as a result of trading pursuant to the CTS System.

44. In fact, Cybulski lost $4,704.25 during his first two months of trading, and lost more than $14,330.89 during his 20 months of sporadic and limited trading. He never made enough money trading to buy either a car or a house or to give up his construction business. Cybulski's construction license was revoked in 1991.

Concerning Stewart's Trading Record

45. During his solicitations of prospective students, Stewart represented that he was doing well trading and was making "real money" trading. Stewart used a laptop computer and his purported trading account "statements" during his in-person demonstrations to show prospective students the results of his purportedly real trades. Stewart never told the prospective students that the trading results were not his own actual trading results.

46. In fact, Stewart lost approximately $10,500 during his one year of trading pursuant to the System, and he made money in only one of the months during which he traded.

IV.

VIOLATIONS OF THE COMMODITY EXCHANGE ACT

AND REGULATIONS THEREUNDER

COUNT I

VIOLATIONS OF SECTION 4b(a)(i) and (iii) OF THE ACT:

COMMODITY FUTURES FRAUD

47. The allegations contained in paragraphs 1 through 47 above are realleged and incorporated by reference.

48. From February 1997 through July 1998, Respondents CTS and Roeder, from May 1997 to June 1998, Respondent Cybulski, and from November 1997 to June 1988, Respondent Stewart violated Sections 4b(a)(i) and (iii) of the Act, 7 U.S.C. 6b(a)(i) and (iii) (1994), in that they willfully cheated, defrauded or deceived, or attempted to cheat, defraud or deceive other persons by, among other things, making material misrepresentations and omissions of fact, including but not limited to the misrepresentations and omissions set forth in paragraphs 9 to 47, above.

49. Roeder directly or indirectly controlled CTS, and did not act in good faith or knowingly induced, directly or indirectly, the violations described above, and, pursuant to Section 13(b) of the Act, 7 U.S.C. 12c(b) (1994), is liable for CTS' violations of Sections 4b(a)(i) and (iii) of the Act.

50. Pursuant to Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4 (1994), and Regulation Section 1.2, 17 C.F.R. 1.2 (1999), CTS is liable for any violations of Sections 4b(a)(i) and (iii) of the Act by its officers, directors, managers, employees and agents, including Roeder, Cybulski and Stewart, in that all such violations were within the scope of each person's office or employment with CTS.

COUNT II

VIOLATIONS OF SECTION 4o(1) OF THE ACT

AND COMMISSION REGULATION SECTION 4.41(a):

FRAUD BY A CTA

51. The allegations contained in paragraphs 1 through 51 above are realleged and incorporated herein by reference.

52. From February 1997 through July 1998, Respondents CTS and Roeder, from May 1997 to June 1998, Respondent Cybulski, and from November 1997 to June 1988, Respondent Stewart, while acting as CTAs, violated Section 4o(1) of the Act, 7 U.S.C. 6o(1) (1994), and Section 4.41(a) of the Commission's Regulations, 17 C.F.R. 4.41(a) (1999), in that the Respondents directly or indirectly employed a device, scheme or artifice to defraud clients or prospective clients, or engaged in transactions, practices or a course of business which operated as a fraud or deceit upon clients or prospective clients, including, but not limited to, the activities set forth in paragraphs 9 to 47, above.

53. Roeder directly or indirectly controlled CTS, and did not act in good faith or knowingly induced, directly or indirectly, the violations described above and, pursuant to Section 13(b) of the Act, is liable for CTS' violations of Section 4o(1) of the Act and Regulation Section 4.41(a).

54. Pursuant to Section 2(a)(1)(A)(iii) of the Act and Regulation Section 1.2, CTS is liable for any violations of Section 4o(1) of the Act and Regulation Section 4.41(a) by its officers, directors, managers, employees and agents, including Roeder, Cybulski and Stewart, in that all such violations were within the scope of each person's office or employment with CTS.

COUNT III

VIOLATIONS OF COMMISSION REGULATION 4.41(b):

FAILURE TO DISPLAY CAUTIONARY STATEMENT REGARDING

LIMITATIONS OF HYPOTHETICAL TRADING RESULTS

55. The allegations contained in paragraphs 1 through 55 above are realleged and incorporated herein by reference.

56. Pursuant to Section 4.41(b) of the Commission's Regulations, 17 C.F.R. 4.41(b) (1999), a CTA must not present the performance of any simulated or hypothetical commodity interest account, transaction in a commodity interest account, or series of transactions in a commodity interest of a CTA unless such performance is accompanied by the required cautionary warning concerning the limitations of hypothetical trading, as set forth in Section 4.41(b).

57. From February 1997 through July 1998, Respondent CTS, while acting as a CTA, violated Regulation Section 4.41(b) in that it included hypothetical trading results in its promotional materials and on its Internet website, but did not include in the promotional material and on the website the required cautionary warning concerning the limitations of hypothetical trading results.

58. Roeder directly or indirectly controlled CTS, and did not act in good faith or knowingly induced, directly or indirectly, the violations described above, and, pursuant to Section 13(b) of the Act, is liable for the violations of Regulation Section 4.41(b).

59. Pursuant to Section 2(a)(1)(A)(iii) of the Act and Regulation Section 1.2, CTS is liable for any violations of Section 4.41(b) by its officers, directors, managers, employees and agents, including Roeder, Cybulski and Stewart, in that all such violations were within the scope of each person's office or employment with CTS.

COUNT IV

VIOLATIONS OF SECTION 4m(1) OF THE ACT, 7 U.S.C. 6m(1) (1994):

ACTING AS AN UNREGISTERED COMMODITY TRADING ADVISOR

60. The allegations of paragraphs 1 through 60 are realleged and incorporated herein by reference.

61. From February 1997 through July 1998, Roeder violated Section 4m(1) of the Act, 7 U.S.C. 6m(1) (1994), in that she, without being registered as a CTA, managed four customer accounts, as set forth in paragraph 19, above. During this time, Roeder made use of the mails or other instrumentalities of interstate commerce in connection with her business as a CTA.

COUNT V

VIOLATIONS OF SECTIONS 4.31(a) AND (b) OF THE

REGULATIONS, 17 C.F.R. 4.31(a) AND (b) (1999):

CTA REGULATORY VIOLATIONS

62. The allegations contained in paragraphs 1 through 62 are realleged and incorporated by reference.

63. From February 1997 through July 1998, Roeder violated Regulations Sections 4.31(a) and (b), 17 C.F.R. 4.31(a) and (b) (1999), by 1) soliciting and entering into agreements to manage at least four client accounts without first delivering the mandatory Disclosure Document to these prospective clients prior to managing such accounts, and 2) without receiving back from these prospective clients an acknowledgement that these prospective client received the Disclosure Document.

V.

By reason of the foregoing allegations, the Commission deems it necessary and appropriate, pursuant to its responsibilities under the Act, to institute public adminis-trative proceedings to determine whether the allegations set forth in Section III above are true and, if so, whether an appropriate order should be entered in accordance with Sections 6(c) and 6(d) of the Act, 7 U.S.C. 9 and 13b(1994).

Section 6(c) allows the Commission to enter an order (1) prohibiting a Respondent from trading on or subject to the rules of any contract market and requiring all contract markets to refuse such person all trading privileges thereon for such period as may be specified in the Commission's Order, (2) if the Respondent is registered with the Commission in any capacity, suspending, for a period not to exceed six months, or revoking the registration of that Respondent, (3) assessing against the Respondent a civil penalty of not more than the higher of $110,000 or triple the monetary gain to the Respondent for each violation of the Act or Regulations committed after November 27, 1996, and (4) requiring restitution to customers of damages proximately caused by the violations of the Respondent.

Section 6(d) allows the Commission to enter an Order directing that the Respondent cease and desist from violating the provisions of the Act and Regulations found to have been violated.

VI.

WHEREFORE, IT IS HEREBY ORDERED that a public hearing for the purpose of taking evidence and hearing arguments on the allegations set forth in Section III above be held before an Administrative Law Judge, in accordance with the Rules of Practice under the Act, 17 C.F.R. 10.1 et seq. (1999), at a time and place to be fixed as provided in Section 10.61 of the Rules of Practice, 17 C.F.R. 10.61 (1999), and that all post-hearing procedures shall be conducted pursuant to Sections 10.81 through 10.1-07 of the Rules of Practice, 17 C.F.R. 10.81 through 10.107 (1999).

IT IS FURTHER ORDERED that each Respondent shall file an Answer to the allega-tions against said Respondent in the Complaint within twenty (20) days after service, pursu-ant to Section 10.23 of the Rules of Practice, 17 C.F.R. 10.23 (1999), and pursuant to Section 10.12(a) of the Rules of Practice, 17 C.F.R. 10.12(a) (1999), shall serve two copies of such Answer and of any document filed in this proceeding upon Karen Kenmotsu or Richard Glaser, Trial Attorneys, Commodity Futures Trading Commission, Division of Enforcement, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, or upon such other counsel as designated by the Division. If any Respondent fails to file the required Answer or fails to appear at a hearing after being duly served, such Respondent shall be deemed in default, and the proceeding may be determined against such Respondent upon consideration of the Complaint, the allegations of which shall be deemed to be true.

IT IS FURTHER ORDERED that this Complaint and Notice of Hearing shall be served on each Respondent personally or by certified or registered mail forthwith pursuant to Section 10.22 of the Commission's Rules, 17 C.F.R. 10.22 (1999).

In the absence of an appropriate waiver, no officer or employee of the Commission engaged in the performance of the investigative or prosecutorial functions in this or any factual-ly related proceeding will be permitted to participate or advise in the decision upon this matter except as witness or counsel in proceedings held pursuant to notice.

By the Commission
Dated: February 28, 2000
________________________________
Jean A. Webb
Secretary of the Commission
Commodity Futures Trading Commission