Release: 4283-99 (SA99-CA0684)

For Release: June 29, 1999

CFTC FILES COMPLAINT AGAINST KENT C. CALHOUN OF HUNT, TEXAS, ALLEGING
    THAT HE COMMITTED FRAUD IN USING THE CFTC's NAME TO SOLICIT CUSTOMERS TO
    PURCHASE HIS COMMODITY TRADING SYSTEMS AND ATTEND HIS COMMODITY TRADING
    SEMINARS

CFTC Seeks Injunctive and Other Equitable Relief, Including
    Disgorgement of Ill-Gotten Gains, Restitution to Defrauded Customers, and
    Civil Monetary Penalties

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    the filing of a four-count civil injunctive complaint against Kent C. Calhoun of
    Hunt, Texas, alleging that Calhoun committed fraud by, among other things,
    implying in his solicitations to customers that the CFTC has in some manner
    recommended or approved him as a commodity trading advisor (CTA) or
    otherwise passed on his abilities or qualifications as a CTA. Calhoun has
    not been registered with the CFTC in any capacity since July 1983, when he
    was registered as a CTA.

Specifically, the complaint, filed in the U.S. District Court for the
    Western District of Texas, San Antonio Division, on June 29, 1999, alleges
    that from at least June 1995 to the present, Calhoun, individually, as an
    agent of, or doing business as KCI seminars, solicited customers to
    purchase his commodity trading systems and attend his KCI commodity trading
    seminars through national advertisements that included false and misleading
    statements representing or implying that the CFTC has documented, verified,
    or otherwise passed upon the success of his KCI trading systems and/or the
    accuracy of his advertisements for such trading systems.

The CFTC civil complaint further alleges that by making those false and
    misleading statements and other misrepresentations, and by failing to
    disclose material facts, Calhoun violated the CEA's anti-fraud provisions
    (sections 4b(a)(i) and 4o) and CFTC regulations 4.16 and 4.41.
    Commission regulation 4.16 specifically prohibits CTAs from representing or
    implying that the CFTC has recommended or approved them or otherwise passed
    upon their abilities or qualifications as CTAs.

Furthermore, the complaint alleges that Calhoun placed advertisements
    that would lead a reasonable person to believe, among other things,
    that:

-- Calhoun had "legally documented" or substantiated to the CFTC or a
      federal district court that he is the most accurate time and price
      projection technical analyst who has ever lived, when, in fact, he had
      not done so; -- Calhoun's advertisements included facts about, among other
      things, the success and profitability of his commodity trading systems,
      the accuracy of which was either documented or verified by the CFTC, when
      they were not; -- The CFTC had verified the profitability of individuals who
      allegedly used Calhoun's systems to trade commodity futures, when it
      did not; -- The CFTC had documented, verified, validated, or substantiated the
      truthfulness of Calhoun's advertisements, the expenditures Calhoun
      allegedly incurred in testing and/or developing his commodity trading
      systems, or the authenticity of Calhoun's guarantee or refund
      policy, when it had not; and -- The CFTC otherwise passed upon Calhoun's trading advice,
      trading systems, or advertisements and/or recommended or approved Calhoun
      or otherwise passed upon his abilities and qualifications as a CTA, when
      it had not.


The CFTC is seeking preliminary and permanent injunctions to prevent
    Calhoun from further violating the CEA and CFTC regulations, an accounting,
    disgorgement of ill-gotten gains, restitution to defrauded customers, and
    civil monetary penalties of not more than $100,000 per violation or triple
    the monetary gain to Calhoun for each violation of the CEA committed prior
    to November 27, 1996, or $110,000 or triple the monetary gain for each
    violation committed after that date.

# # #