CTS Financial Publishing Inc., an investment counseling service based in North Palm Beach, FL, Chicago-based Dearborn Financial Publishing Inc., and two individuals have settled charges of fraudulent representation in their direct mail and direct response space solicitations that had been brought by the Commodity Futures Trading Commission (CTFC).
The defendants admitted no wrongdoing.
Under the terms of the July 5 settlement, the defendants agree to desist from further violations of CFTC regulations and the Commodity Exchange Act. They also agree to pay a civil penalty of $220,000 and not misrepresent the risks and potential rewards of trading futures or options while having all advertisements, promotions or solicitations reviewed by legal counsel for compliance.
According to the Sept. 28 complaint, Dearborn, CTS (formerly Commodity Trend Service, Inc.), CTS technical advisor Nick Van Nice and Dearborn president Dennis Blitz either misrepresented or omitted information in their advertisements.
Specifically, the complaint alleges that they misrepresented the profit potential of futures and options trading; used testimonials related to one product when promoting other products; falsely represented the trading success records of CTS employees, including Van Nice; presented profit examples without disclosing that the examples were hypothetical; omitted disclosing that commodity options could involve unlimited risk and omitted disclosing the seasonal tendencies of underlying commodities are factored into the option prices.
According to CTFC’s Sept. 28, 2000 complaint, between 1994 and 1996 CTS Financial Publishing’s 1.4 million mail efforts, combined with direct response space advertisements, yielded at least 9,800 orders for Future Charts, The Million Dollar No-Risk Trading Course, Futures Options Weekly, or The Million Dollar Trading Adventure.
Neither Van Nice nor Blitz were available for comment at deadline.
Network
