[Federal Register Volume 65, Number 89 (Monday, May 8, 2000)]
[Notices]
[Pages 26615-26616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11456]


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FEDERAL TRADE COMMISSION

[File No. 002 3085]


CompuTrade LLC, et al.; 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 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.

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. (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

[[Page 26616]]

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 
Sec. 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 CompuTrade LLC, 
a corporation, and Bernard Lewis, individually and as an officer of the 
corporation (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 sell and distribute computer software and training for 
buying and selling foreign currencies on a daily basis. They advertise 
on their Internet Web sites, www.computrades.com and 
www.computrader.net. 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 respondents made 
unsubstantiated claims that users of respondents' currency trading 
program could reasonably expect to earn large profits of $500 to $750 
or more per day, and as much as six or seven figures annually (i.e., 
more than $1,000,000); that users could reasonably expect to earn huge 
profits even if they had no previous experience in currency trading; 
and that testimonials appearing in the advertisements for respondents' 
currency trading program reflected the typical or ordinary experience 
of members of the public who use the program. In addition, the 
complaint alleges that respondents misrepresented that users of their 
currency trading program could reasonably expect to trade with little 
financial risk.
    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 order requires respondents to have a 
reasonable basis substantiating any representation that users of 
respondents' currency trading program can reasonably expect to earn 
large profits: (1) of $500 to $750 or more per day; (2) of as much as 
six or even seven figures annually (i.e., more than $1,000,000); or (3) 
even if they have no previous experience in currency trading. Part I 
also requires respondents to possess a reasonable basis substantiating 
claims about the amount of earnings, income, or profit that a 
prospective user of any trading program could reasonably expect to 
attain, or about any financial benefit or other benefit from any 
trading program offered by respondents.
    Part II of the proposed order prohibits respondents from 
misrepresenting that users of any trading program can reasonably expect 
to trade with little or no financial risk and from misrepresenting the 
extent of risk to which users of any such program are exposed.
    Part III of the proposed order requires respondents to disclose, 
clearly and conspicuously, ``CURRENCY [or STOCK, COMMODITY FUTURES, 
OPTIONS, ETC., as applicable] TRADING involves high risks and YOU can 
LOSE a lot of money,'' in close proximity to any representation they 
make about the financial benefits of any trading program. This 
disclosure is in addition to, and not instead of, any other disclosure 
that respondents may be required to make.
    Part IV of the proposed order prohibits respondents 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 respondents 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 and VI 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 VII requires CompuTrade to notify the 
Commission of any changes in the corporate structure that might affect 
compliance with the order. Part VIII requires that the individual 
respondent notify the Commission of changes in his employment status 
for a period of ten years. Part IX requires CompuTrade 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. 00-11456 Filed 5-5-00; 8:45 am]
BILLING CODE 6750-01-M