26614 Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Notices

an Internet chat room where

respondents provide ‘‘live’’ day trading

advice during the day on when to buy

and sell stocks. The ‘‘Daily Picks

Newsletter,’’ and the ‘‘Hot Small Caps

Newsletter’’ are in the form of e-mails

delivered once per day which contain

advice for stock trading. Respondents

advertise on their Internet Web site,

www.daytradingintl.com. This matter

concerns allegedly deceptive

representations of the earnings and

profit potential, as well as the extent of

risk involved in using respondents’

stock trading program.

The Commission’s proposed

complaint alleges that respondents

made unsubstantiated claims that users

of respondents’ ‘‘Live Interactive

Trading Room’’ program can reasonably

expect to achieve profits on their trades

more than 85 percent of the time and

achieve substantial profits on a

consistent basis (e.g., $500 per trade,

two or three times each day); and that

users of respondents’ ‘‘Daily Picks

Newsletter’’ program can reasonably

expect to make short term trades, held

one to five days, that achieve a rate of

return of between two percent and ten

percent per trade.

In addition, the complaint alleges that

respondents misrepresented that users

of their trading programs can reasonably

expect to trade stocks profitably with

little or no risk. The complaint also

alleges that respondents misrepresented

that since January 1996, their ‘‘Daily

Picks Newsletter’’ program has returned

an average of 167 percent annually and

that during 1996 and 1997, their ‘‘Hot

Small Caps Newsletter’’ program

returned an average annual return of

214 percent. The complaint explains

that respondents did not begin to offer

the ‘‘Daily Picks Newsletter’’ or ‘‘Hot

Small Caps Newsletter’’ until 1998.

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 about

the percentage, ratio, or number of

trades that a user of any trading program

could reasonably expect to be profitable;

the amount of earnings, income, or

profit that a user of any trading program

could reasonably expect to attain; the

rate of return that a user of any trading

program could reasonably expect to

attain or the length of time over which

such a rate of return could reasonably be

expected; or the past performance of a

trading program. Part I also requires

respondents to possess a reasonable

basis substantiating claims about any

financial benefit or other benefit from

any trading program.

Part II of the proposed order prohibits

respondents from misrepresenting that

since January 1996, respondents’ ‘‘Daily

Picks Newsletter’’ program has returned

an average of 167 percent annually or

that during 1996 and 1997, respondents’

‘‘Hot Small Caps Newsletter’’ program

returned an average annual return of

214 percent. It also 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, ‘‘DAY 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 day trading

program. This disclosure is in addition

to, and not instead of, any other

disclosure that respondents may be

required to make.

Parts IV–VII of the proposed order

require respondents 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 their

employment status and any changes in

the name of their business for a period

of ten years; and 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.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 00–11458 Filed 5–5–00; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 002–3053]

Ellery Coleman; Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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 § 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 31⁄2 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

Federal Register / Vol. 65, No. 89 / Monday, May 8, 2000 / Notices 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

FEDERAL TRADE COMMISSION

[File No. 002 3085]

CompuTrade LLC, et al.; Analysis To

Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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 § 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