September 27, 2016
CFTC Orders Advanced Trading Workshop, Inc. of Jamesville, New York, to Pay a Total of $940,000 in Disgorgement and a Civil Monetary Penalty for Solicitation Fraud and Failure to Register
Washington, DC – The U.S. Commodity Futures Trading Commission today issued an Order filing and simultaneously settling charges against Respondent Advanced Trading Workshop, Inc. (ATW) of Jamesville, New York, for fraudulently soliciting clients and prospective clients to purchase access to an online trading room and failing to register with the CFTC as a Commodity Trading Advisor (CTA) as required. ATW, in or about November 2013, changed its name to Sniper Scalping, Inc.
The CFTC Order requires ATW to disgorge $470,000 in unlawful gains and to pay a $470,000 civil monetary penalty. The Order also imposes permanent trading, solicitation, and registration bans against ATW, and requires it to cease and desist from violating provisions of the Commodity Exchange Act (CEA) and CFTC Regulations, as charged.
According to the Order, from in or around August 2012 to at least June 2013, ATW solicited members of the public to purchase access to ATW’s “Real Time Trade Room” (the Room), which ATW described on its website as an online forum in which ATW’s clients could learn to trade futures contracts by observing ATW’s Trader (the Trader), by “look[ing] over the shoulder of a very experienced professional trader to see how it is done.” ATW claimed, according to the Order, that the Trader traded futures contracts “live” in the Room and that “you’ll actually see him physically enter the trader order . . . you’ll see that order get filled and then you’ll see the order either go on to be a winner or to be a loser.” The Order finds that ATW stated in promotional materials that the Trader was a “master trader,” was “at the absolute pinnacle of his profession,” was “at the absolute top of this trading game not just in our country but in the world,” was a “fantastic talent,” and was an “unbelievable trader, incredibly successful, high-level trader.”
However, according to the Order, ATW made false and misleading statements to clients and prospective clients by touting the Trader’s experience as a professional trader and by stating that Trader traded futures contracts “live” in the Room. According to the Order, all of these statements were false because the Trader never traded any futures contracts in the Room and only engaged in hypothetical or simulated trading and therefore never earned any trading profit in the Room, and what little trading the Trader had done in his own trading account had not been profitable. Simulated trading is materially different than actual trading because simulated trading does not involve the actual execution of any trades, and therefore may under- or over-compensate for the impact of certain market factors such as the lack of liquidity, according to the Order. Moreover, ATW either knew that its statements concerning Trader’s experience and success trading futures contracts “live” in the Room were false or misleading or acted with reckless disregard as to the truth or falsity of those statements, the Order finds.
The Order also finds that ATW provided information concerning market conditions that signaled when one should purchase or sell futures contracts and as such acted as a CTA by engaging, for compensation or profit, in the business of advising its clients as to the value of, or the advisability of trading in, futures contracts. ATW and the Trader also solicited clients to participate in a managed account program pursuant to which Trader had authority to manage clients’ futures trading accounts for a monthly fee, but failed to register with the CFTC as a CTA, as required, and permitted the Trader to be associated with ATW as an Associated Person of a CTA, without being registered as such.
ATW Received at Least $470,000 from Clients in the Fraud
The Order finds that clients generally paid a one-time fee ranging from approximately $4,995 to $7,500 for six months of access to ATW’s Room, after which Clients would have the opportunity to purchase month-to-month access to the Room. ATW received at least $470,000 from Clients in connection with the fraud.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this action are R. Stephen Painter, Jr., David W. MacGregor, Lenel Hickson, Jr., and Manal M. Sultan.
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CFTC’s Fraud Advisories, Including Commodity Trading Systems Sold on the Internet
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including an Advisory on Commodity Trading Systems Sold on the Internet. The CFTC has seen an increase in websites that fraudulently promote commodity trading systems and advisory services, and the information in this Advisory is designed to help customers identify this potential swindle.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: September 27, 2016