Warrior Trading reached a settlement to pay $3 million in restitution for a’misleading’ day trading scheme
Is trading warrior misleading day traders?
The FTC settled claims that Warrior misled customers about the profitability, risk, and earning potential of Warrior’s day-trading strategies and related goods and services, such as courses, workshops, programs, and tools, with online day-trading firms Warrior Trading, Inc. and Warrior Operating, Inc., as well as the company’s owner and operator (collectively “Warrior”).
On April 19, the US regulator alleged that Great Barrington, Massachusetts-based Warrior Trading made “misleading and irrational statements” to prospective day trading clients.
A stock market strategy known as day trading is buying and selling shares, with positions being closed prior to market closing. Even though engaging in speculative activity might be lucrative, it can also be riskier than making longer-term investments, particularly if you don’t conduct the necessary research in advance.
Warrior Trading and its CEO Ross Cameron are accused of “persuad[ing] consumers to spend hundreds or thousands of dollars for a trading strategy that ultimately failed to pay off for most customers,” according to the FTC (.PDF).
Through online programs, ebooks, a live chat network for members, and “masterclasses,” traders marketed trading strategies to customers. Facebook, YouTube, and Instagram were just a few of the social media sites that were used to advertise the shows.
Online advertisements were used by Warrior Trading as well. Examples given by the regulator include:
“Learn to Trade With Certainty Towards The Financial Freedom You’ve Always Wanted”
“Learn How I Made over $101,280.47 in Verified Profits Day Trading Part Time in Under 45 Days Using 3 Simple Strategies that You Can Use Immediately to Increase profits and Reduce Losses NOW!”
According to the FTC’s complaint, Cameron used the terms “profitable” and “scalable” to describe his product, but the watchdog took offense to these terms and claimed the sales presentation broke both the FTC Act and the Telemarketing Sales Rule (TSR).
The US agency also claimed that “the vast majority of customer accounts actually lost money, with many individuals losing thousands of dollars trading on top of the thousands they paid Warrior Trading.”
Warrior Trading has been prohibited from making “baseless” statements about the possibility to make money on the stock market using the company’s tactics, according to a court ruling, and is required to pay around $3 million in refunds.
Additionally, the business is forbidden from ever again “misrepresenting through telemarketing concerning investment alternatives, including the earnings potential or level of risk a client may incur.”
The decision came with a “heavy price” for Warrior Trading to pay, according to Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, and it highlights the agency’s continued “crackdown” on “false profit claims and fake opportunities.”
22/4/09 9:00 AM GMT Update: According to a statement from Warrior Trading:
“We want to make it clear at the opening of this statement that Ross Cameron’s comments about his earnings are accurate. His broker statements are still accessible to the general public on our website, as they have been for years, and they are still audited and confirmed at the conclusion of every fiscal year.
We do think that the more knowledgeable a consumer is about the dangers and difficulties of trading, the better it is for our sector as a whole. The regulators and Warrior Trading concur that day trading is dangerous and not a quick way to “get rich.” In accordance with the FTC’s recommendations, we hope that our enlarged disclaimer clarifies the dangers associated with day trading for day traders and others who are only considering it.
Like being an entrepreneur, actively trading the markets is something that many Americans hope to accomplish. While it may be challenging and dangerous, we think that those who choose to travel that path need assistance and high-quality education. We look forward to keeping the risks and obstacles open and honest with customers, as well as offering those who choose to embark on the adventure the greatest possible educational opportunity.
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