Release: #4668-02 (CFTC Docket No.00-27)
For Release: July 11, 2002
FLORIDA WOMAN AND COMPANY SETTLE CFTC CHARGES ALLEGING THEY FRAUDULENTLY MARKETED COMMODITY TRADING SYSTEMS
CFTC Imposed Trading Bans and Penalties on Bernadette Flavell and Systems
of Success – Window to Profit (SOS)
Ads Falsely Claimed You Can “Make $1.2 Million in 1 Year” Using the SOS Trading System
WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) announced today the settlement of an enforcement action, filed on September 7, 2000, against Bernadette Flavell of Coral Springs, Florida; Systems of Success -Window to Profit (SOS) and others. The CFTC complaint charged Flavell, SOS, and the other respondents with fraudulently marketing commodity futures trading systems (see CFTC News Release 4444-00, September 7, 2000).
The CFTC settlement order, filed on July 11, 2002, finds that, from September 1996 until January 1999, Flavell, who for a portion of that time was a CFTC registrant, and SOS fraudulently marketed SOS’s commodity futures trading systems. The order finds that Flavell and SOS’s fraudulent solicitations -- made in newspaper advertisements and promotional materials -- presented hypothetical trading results as actual trading results and misrepresented the profit potential and risks associated with futures trading. For example, according to the order, Flavell and SOS placed advertisements for the SOS trading systems in Investor’s Business Daily, which included claims such as, “Make $1.2 Million in 1Year.”
The order further finds that Flavell and SOS marketed the SOS systems by providing prospective clients with purported track records of the trading systems, which portrayed a rosy picture of consistent profits -- even though the actual trading results of their clients who traded using the systems varied substantially from the track records they were distributing. The order also finds that Flavell and SOS failed to provide the cautionary statement explaining the inherent limitations of hypothetical performance results, as required by federal commodities laws.
“We continuously monitor a broad range of publications for these types of scams. Quite frankly, it is amazing how advertisements for this type of fraud show up over and over again in respectable publications,” said Gregory Mocek, the CFTC’s Director of Enforcement.
The CFTC settlement order requires that Flavell and SOS cease and desist from violating the Commodity Exchange Act and CFTC regulations as charged in the complaint, and:
Flavell and SOS also agreed never to apply for registration or act in any capacity requiring registration. Flavell and SOS, in consenting to the entry of the order, neither admitted nor denied the findings in the order or the allegations in the complaint.
On June 17, 2002, the CFTC filed a settlement order against the other remaining respondent, Kevin Kates (see CFTC News Release 4657-02, June 17, 2002).
The following Division of Enforcement staff are responsible for this case: Charles Sgro, Beth Morgenstern, Elizabeth Brennan, Joseph Rosenberg, Eliud Ramirez, and Judith Slowly.
A copy of the Commission’s Order and the CFTC complaint may be obtained at www.cftc.gov.
Regional Counsel, Eastern Regional Office
CFTC Division of Enforcement (646) 746-9759
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