[Federal Register Volume 65, Number 89 (Monday, May 8, 2000)]
[Notices]
[Pages 26614-26615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11457]


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FEDERAL TRADE COMMISSION

[File No. 002-3053]


Ellery Coleman; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive 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.

DATES: Comments must be received on or before May 30, 2000.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW, Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Stephen Gurwitz or Michael Ostheimer, 
FTC/H-238, 600 Pennsylvania Ave., NW, Washington, D.C. 20580. (202) 
326-3272 or 326-2699.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 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 May 1, 2000), on the World Wide Web, at ``http://www.ftc.gov/ftc/
formal.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, 
D.C. 20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania, Ave., NW, 
Washington, D.C. 20580. Two paper copies of each comment should be 
filed, and should be accompanied, if possible, by a 3\1/2\ inch 
diskette containing an electronic copy of the comment. Such comments or 
views 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 Ellery Coleman, 
individually and

[[Page 26615]]

doing business as Granite Investments (``respondent'').
    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.
    Respondent sells and distributes various computer software programs 
and training for buying and selling S&P futures contracts on a daily 
basis. Respondent advertises on his Internet Web site, 
www.choicedaytrades.com. This matter concerns allegedly deceptive 
representations of the earnings and profit potential, as well as the 
extent of risk involved in using respondent's trading methods.
    The Commission's proposed complaint alleges that respondent made 
unsubstantiated claims that users of his S&P futures trading programs 
can reasonably expect to achieve substantial profits on a consistent 
basis (e.g., $25,000 per futures contract); that specific trades or 
investments enumerated in respondent's advertisements were actually 
made and resulted in the substantial profits stated in the 
advertisements; and that testimonials appearing in the advertisements 
for respondent's S&P futures trading programs reflect the typical or 
ordinary experience of members of the public who use the programs.
    In addition, the complaint alleges that respondent misrepresented 
that users of his S&P futures trading programs can reasonably expect to 
trade profitably with little financial risk; that testimonials 
appearing in the advertisements for his S&P futures trading programs 
reflect the actual experiences of consumers who have used the programs; 
that he personally uses his S&P futures trading programs to trade 
profitably on his own behalf; and that the trades recommended by his 
S&P futures trading programs, as enumerated in the advertisements, were 
actually made in many cases.
    The proposed consent order contains provisions designed to prevent 
respondent from engaging in similar acts and practices in the future.
    Part I of the proposed order requires respondent to have a 
reasonable basis substantiating any representation that users of his 
S&P futures trading programs can reasonably expect to achieve 
substantial profits on a consistent basis; that specific trades or 
investments were actually made and resulted in substantial profits; 
about the amount of earnings, income, profit or the rate of return that 
a prospective user of any trading program could reasonably expect to 
attain; about the percentage, ratio, or number of trades that a 
prospective user of respondent's S&P futures trading programs could 
reasonably expect to be profitable; or about any financial benefit or 
other benefit from any trading programs offered by respondent.
    Part II of the proposed order prohibits respondent from 
misrepresenting that users of any trading program can reasonably expect 
to trade profitably with little or no financial risk; that respondent 
personally uses his trading programs to trade on his own behalf; 
whether trades recommended by respondent's trading programs were 
actually made or were hypothetical; that any testimonial or endorsement 
of respondent's trading programs or training reflects the 
testimonialist's or endorser's actual experience and current opinions, 
findings, beliefs, or experiences; or from misrepresenting the extent 
of risk to which users of any trading program are exposed.
    Part III of the proposed order requires respondent to disclose, 
clearly and conspicuously, ``FUTURES TRADING [or STOCK, CURRENCY, 
OPTIONS, ETC., as applicable] TRADING involves high risks and YOU can 
LOSE a lot of money,'' in close proximity to any representation he 
makes about the financial benefits of any trading program. This 
disclosure is in addition to, and not instead of, any other disclosure 
that respondent may be required to make.
    Part IV of the proposed order prohibits respondent from 
representing without a reasonable basis that the experience represented 
by any user, testimonial or endorsement of any trading program 
represents the typical or ordinary experience of members of the public 
who use the program; or respondent must disclose either what the 
generally expected results would be for users of the trading program, 
or the limited applicability of the endorser's experience to what users 
may generally expect to achieve, that is, that users should not expect 
to experience similar results.
    Parts V-XI of the proposed order require respondent to keep copies 
of relevant advertisements and materials substantiating claims made in 
the advertisements; to provide copies of the order to certain 
personnel; to notify the Commission of changes in Granite Investments 
that may affect the order; to notify the Commission of changes in 
respondent's employment status for a period of ten years; and to file 
compliance reports with the Commission. Part X 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.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-11457 Filed 5-5-00; 8:45 am]
BILLING CODE 6750-01-M