Release 4544-01 (CFTC Docket 01-16)
For Release July 12, 2001


Gramalegui Made False Claims that his Mother Profitably Traded with his System

WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced today that it filed and settled an action on July 12, 2001, against Vail, Colorado resident Gregory L. Gramalegui for failing to disclose that the so-called trading results presented in his advertisements were based on hypothetical, rather than actual, trading.

As part of the settlement, the CFTC issued an order finding that Gramalegui, who was doing business as S&P Safe Co., repeatedly used a false advertisement in marketing his commodity trading system called the Trend Reflection Trading System.

Specifically, the CFTC order finds that from July 1998 to June 1999, Gramalegui, through advertisements in futures industry magazines, made false claims that his mother traded the Trend System, and implied that she had personally traded profitably. However, as the order notes, his mother did not personally trade with the system. The order clarified that Gramalegui made commodity trades in an account in his mother’s name, and contrary to the claims made by Gramalegui, the account had net losses. Gramalegui's solicitations of the Trend System operated as a fraud or deceit upon customers, in violation of the Commodity Exchange Act (CEA).

The CFTC order further finds that Gramalegui failed to disclose the fact that the Trend System's ostensible record of trading results – a record that he published in magazine advertisements and on his Internet web site -- was based on hypothetical trading, rather than actual buying and selling. CFTC regulations require that hypothetical trading results, and the inherent limitations of hypothetical trading, must be labeled as such in any public statement that notes results.

Gramalegui, without admitting or denying the factual or legal findings of the order, consents to its entry. The order requires, among other things, that Gramalegui comply with undertakings, which include abstention from making unsubstantiated claims of profits or risk in connection with the use of a commodity trading system.

Copies of the CFTC order are available at

Case Contact
Susan Bovee
Associate Director, CFTC Division of Enforcement