CFTC News Release 4361-00 (99-CV-1184)
For Release: February 9, 2000
SELLERS OF COMMODITY TRADING COURSE PAY $185,000 IN RESTITUTION AND PENALTIES AND ACCEPT INDUSTRY BAN UNDER CONSENT ORDER ISSUED BY MINNESOTA COURT
CFTC Had Charged Pelton Street Publishing, Inc. and Roger Martin Hoy with Fraudulent Sales Practices
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on February 8, 2000, the Honorable Donovan W. Frank of the U.S. District Court for the District of Minnesota entered a consent order of permanent injunction which, among other things, enjoins Pelton Street Publishing, Inc. and Roger Martin Hoy a/k/a Roger Martin from further violating the anti-fraud provisions of the Commodity Exchange Act (CEA) and CFTC regulations and bars them from soliciting or accepting funds for futures trading and otherwise participating in the commodity futures industry in any capacity.
The order also requires Pelton and Hoy to pay restitution of $120,000 to purchasers of their commodity trading course within 60 days of the order, and a civil monetary penalty of $65,000.
The court's order settles a four-count injunctive complaint alleging the fraudulent solicitation of customers to purchase a commodity trading course filed by the CFTC on August 2, 1999, against Pelton and Hoy (see CFTC New Release #4297-99, August 2, 1999). Pelton and Hoy consented to the entry of the consent order without admitting or denying the allegations of the complaint.
The complaint alleged that Pelton and Hoy fraudulently marketed and sold a 90-day commodity trading "course" called The Keys to the Marvelous Money Machine, which consisted of a manual and audiotapes that described the rudiments of futures trading and Hoy's trading methodology, and access to a recorded telephone message line that made trading recommendations and tracked trades Hoy allegedly made on his own behalf.
As alleged in the complaint, Pelton and Hoy's marketing brochures, which were mailed to individuals nationwide, included claims that Hoy made enormous profits using the Money Machine's trading advice, when, in fact, Hoy had lost over $300,000 trading commodity futures and options, according to the complaint. The complaint also alleged that the brochures provided phony testimonials from customers, some of whom had never purchased the Money Machine course and none of whom had engaged in profitable trading based on the course's trading advice.
Based on this alleged conduct, the CFTC complaint charged that the defendants violated 4b(a), 4c(b), and 4o of the CEA and CFTC regulations 4.41 and 33.10 by making false claims concerning the profitability and risks associated with trading based on their course's recommendations. The CFTC also charged Pelton with violating CFTC regulation 4.33 by failing to maintain and produce, upon the CFTC's request, copies or transcriptions of the advice it provided to customers through recorded telephone messages.
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