Federal Trade Commission.
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint that accompanies the consent agreement and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before April 23, 2003.
Comments filed in paper form should be directed to: FTC/Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. Comments filed in electronic form should be directed to: email@example.com, as prescribed below.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Dan Salsburg or Stephen Gurwitz, FTC, Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3402 or 326-3272.End Further Info End Preamble Start Supplemental Information
Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and section 2.34 of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for March 24, 2003), on the World Wide Web, at “http://www.ftc.gov/os/2003/03/index.htm.” A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission in either paper or electronic form. Comments filed in paper form should be directed to: FTC/Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains nonpublic information, it must be filed in paper form, and the first page of the document must be clearly labeled “confidential.” Comments that do not contain any nonpublic information may instead be filed in electronic form (in ASCII format, WordPerfect, or Microsoft Word) as part of or as an attachment to email messages directed to the following email box: firstname.lastname@example.org. Such comments will be considered by the Commission and will be available for inspection and copying at its principal office in accordance with section 4.9(b)(6)(ii) of the Commission's Rules of Practice, 16 CFR 4.9(b)(6)(ii)).
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final approval, an agreement containing a consent order from The Ted Warren Corporation, The Ken Roberts Institute, Inc., and The Ken Roberts Company, corporations, and Ken Roberts, as an officer of the corporations (together, “respondents”).
The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.
Respondents advertise and sell materials (“Investment Courses”) that purport to teach purchasers how to profitably trade stocks, commodity futures and options, and real estate. The Investment Courses sold by respondents include the “TWC Stock Course” for trading stocks, the “KRI Investment Portfolio” for creating an investment portfolio, the “KRC Commodity Course” for trading commodity futures contracts and options, and the “Jim Banks Probate Course,” pursuant to a marketing agreement with J.G. Banks, Inc., for purchasing real estate and personal property through probate proceedings. Respondents have sold these Investment Courses through the Internet Web site http://www.kenroberts.net and related Web sites. Start Printed Page 15455
This matter concerns respondents' allegedly deceptive representation that purchasers of the Investment Courses who make profitable “paper trades”—practice trades in which no funds are actually invested—using techniques described in the Investment Courses during one time period are likely to make profitable actual trades when their funds are invested in the market during a later time period. This matter also concerns the respondents' alleged failure to disclose the risks associated with the trading techniques described in the Investment Courses.
The proposed consent order contains provisions designed to prevent respondents from engaging in similar acts and practices in the future.
Part I of the proposed consent order prohibits the respondents from misrepresenting that purchasers of “investment courses” who make profitable “paper trades” are likely to make profitable actual trades when their funds are invested in the market. The term “investment courses” is defined as “any program, service course, instruction, system, training, manual, computer software, or other materials involving the purchase or sale of stocks, currencies, commodity futures, options, real estate through probate proceedings, or other financial instruments or investments.”
Part II of the proposed consent order requires the respondents to make the following six risk disclosures:
1. For all Investment Courses: “WARNING: [FUTURES TRADING, STOCK TRADING, CURRENCY TRADING, OPTIONS TRADING, ETC., as applicable] involves high risks and YOU can LOSE a lot of money.”
2. For all Investment Courses in which purchasers are advised or instructed to “paper trade” or otherwise practice making investments without investing actual funds: “Being a successful PAPER TRADER during one time period does not mean that you will make money when you actually invest during a later time period. Market conditions constantly change.”
3. For all Investment Courses involving securities or the purchasing of options: “When investing in [securities or the purchasing of options, as applicable] you may lose all of the money you invested.”
4. For all Investment Courses involving futures or the granting of options: “When investing in (futures or the granting of options, as applicable) you may lose more than the funds you invested.”
5. For all Investment Courses involving futures and commodity options: “Trading in commodity futures or options involves substantial risk of loss. According to many experts, most individual investors who trade commodity futures or options lose money.”
6. For all Investment Courses in which claims are made regarding past performance: “Past Results are not necessarily indicative of Future Results.”
Parts III and IV of the proposed order require respondents to keep copies of relevant advertisements and materials substantiating claims made in the advertisements and to provide copies of the order to certain personnel. Part V requires TWC, KRI and KRC to notify the Commission of any changes in their corporate structures that might affect compliance with the order. Part VI requires that the individual respondent notify the Commission of changes in his employment status for a period of ten years. Part VII requires TWC, KRI and KRC to file compliance reports with the Commission. Part VIII provides that the order will terminate after twenty (20) years under certain circumstances.
The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.Start Signature
By Direction of the Commission.
Donald S. Clark,
[FR Doc. 03-7609 Filed 3-28-03; 8:45 am]
BILLING CODE 6750-01-P