For Release: May 21, 2003
COMMODITY SOFTWARE VENDOR CHARGED WITH VIOLATING CFTC ORDER
Defendant Swannell Sold His Elliott Wave Analyzer Software Programs Through His Website
WASHINGTON D.C. – The Commodity Futures Trading Commission (CFTC) announced today the recent filing of a two-count civil injunctive complaint in federal district court in Los Angeles against Richard Swannell of Australia, charging that Swannell, who sells commodity trading software online (see CFTC News Release 4442-00, September 7, 2000), violated a September 6, 2000, Commission consent order to which he had voluntarily agreed.
That consent order required Swannell to refrain from presenting hypothetical trading results without warning of the inherent limitations of hypothetical trading, and to clearly identify when trading results were based wholly or partially on simulated or hypothetical trading. The order also prohibited Swannell from making any representations of financial benefits associated with any commodity futures or options trading system without first disclosing “prominently and conspicuously, that futures trading involves high risk with the potential for substantial losses.”
Specifically, the complaint charges, among other things, that Swannell violated the order by using hypothetical trading results to sell his Elliott Wave Analyzer software programs and seminars without disclosing that the trading results were not the result of actual trading. Within the past six months, Swannell's website has included statements that the software is "84.9% accurate- Statistically Proven" and that "the Elliott Wave Analyzer 3 can accurately forecast market movement," according to the complaint. The complaint further alleges that these statements are based upon hypothetical trading but that Swannell failed to disclose this fact and failed to prominently display a warning regarding the limitations of simulated or hypothetical trading results as required by CFTC regulations. In addition, the complaint charges that Swannell did not prominently display a warning of the risks of futures trading, as required by the order.
In its continuing litigation against Swannell, the CFTC is seeking a permanent injunction, repayment of ill-gotten gains, and civil monetary penalties.
The CFTC appreciates the assistance of the Australian Securities & Investments Commission.
The following staff of the CFTC Division of Enforcement were responsible for this action: Robert Hildum, Tim Mulreany, Ken Koh, Jacqueline Hamra Mesa, and Paul Hayeck.
The CFTC Issued a Consumer Advisory-Alert on Websites Selling Commodity Trading Systems
For more information on Commodity Trading Systems, see the CFTC’s Consumer Advisory-Alert of May 1, 2000: Beware of Websites Selling Commodity Trading Systems that Guarantee High Profits with Minimal Risks.
Media Case Contact:
Paul G. Hayeck, Associate Director
CFTC Division of Enforcement
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