Release: #4037-97 (CFTC Docket #97-11)
For Release: July 30, 1997
CFTC FILES AND SETTLES ADMINISTRATIVE PROCEEDINGS
AGAINST VISIONEERING RESEARCH & DEVELOPMENT CO., AND ROBERT W. EVERSON
FOR VIOLATIONS OF THE COMMISSION'S PERFORMANCE RECORD REGULATIONS
Visioneering Agrees to Pay a $50,000 Civil Monetary Penalty,
in Addition to Other Sanctions
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it issued an order instituting administrative proceedings against Visioneering Research and Development Company and Robert W. Everson, the firm's president, a principal, and stockholder -- both located in Las Vegas, Nevada. The CFTC order alleges that from November 1994 through February 1997, Visioneering distorted the performance record reported for two of its managed account programs. Simultaneous with the filing of the administrative proceedings, the CFTC accepted offers of settlement from both respondents.
Visioneering is registered with the CFTC as a commodity trading advisor (CTA), a commodity pool operator, and an introducing broker. Everson is registered with the CFTC as an associated person of Visioneering.
The CFTC order, based on the settlement, finds that Visioneering and Everson violated numerous provisions of the CFTC's regulations regarding the required presentation of a CTA's program and performance record in its Disclosure Documents. From November 1994 until February 1997, Visioneering filed eight Disclosure Documents with the CFTC. The Commission's order finds that four of these Disclosure Documents were filed prior to August 24, 1995, when the CFTC's Part 4 Regulations were amended, and violated various provisions of those former Part 4 Regulations; and the other four Disclosure Documents were filed after that date, and violated the current Part 4 Regulations.
The CFTC order specifically finds that Visioneering caused the performance record of its V-150 Program and V-SP500 Program to reflect client investment in months when there was none and thus depicted a continuous client performance record of up to 24 months when no such performance record existed. The order also finds that Visioneering reported performance results of the V-SP500 Program that were in fact performance results for the V-150 Program. According to the Commission's order, Everson aided and abetted Visioneering in its violation of the regulations and was responsible for these violations as a controlling person of Visioneering.
The order finds that, in addition to including these distorted performance returns in Disclosure Documents sent directly to clients and prospective clients, Visioneering sent the distorted returns of these two programs to industry trade publications that published the distorted performance returns and thereby inadvertently disseminated this inaccurate information to their subscribers.
The order finds specifically that Visioneering and Everson distorted the
performance record of the V-150 and the V-SP500 Programs by:
(1) inaccurately including proprietary trading results in the client composite performance returns;
(2) inaccurately providing capsule performance information that also included proprietary trading results;
(3) inaccurately presenting client and proprietary performance results for the V-SP500 Program for four months when the program was not even in existence by extracting the results from the V-150 Program's proprietary account;
(4) inaccurately presenting performance results of the V-150 Program in December 1995 as performance results of the V-SP500 Program by transferring two open profitable positions from the V-150 Program to the V-SP500 Program;
(5) omitting to disclose the commission rate charged proprietary accounts even though Visioneering was presenting proprietary trading results in its Disclosure Document and the commission rate being charged proprietary accounts was lower than the commission rate charged to customer accounts; and
(6) failing to correct the numerous inaccuracies in the Disclosure
Documents when Visioneering and Everson knew or should have known of these
Furthermore, Visioneering's four Disclosure Documents filed with the CFTC before August 24, 1995, violated multiple sections of the former Part 4 Regulations, according to the order.
Visioneering and Everson, without admitting or denying the findings in the CFTC's Order, consented to the entry of the CFTC order finding that Visioneering and Everson violated CFTC regulations as charged, directing Visioneering and Everson to cease and desist from further such violations, and directing Visioneering to pay a $50,000 civil monetary penalty.
Under the settlement, Visioneering also agreed to address the specific conduct in this matter by agreeing to (1) retain an independent consultant for a two-year period to assist it in providing information in each Disclosure Document and to industry trade publications that is accurate and prepared in accordance with all applicable CFTC and National Future Association (NFA) regulations, and (2) to appoint a compliance officer, other than Everson, who will review information in the Disclosure Documents to ensure that this information is accurate and prepared in accordance with all applicable CFTC and NFA regulations.