WASHINGTON (Legal Newsline) - The U.S. Commodity Futures Trading Commission on May 11 filed a lawsuit in federal court that alleges fraud in the sale of two automated trading systems known as the Boomer and Victory Trading systems.
The defendants in the lawsuit are CTI Group, Cooper Trading and Stephen Craig Symons of Corona del Mar, Calif., and James David Kline of Van Nuys, Calif.
The CFTC complaint was filed in the U.S. District Court for the Southern District of New York. Judge Andrew L. Carter, Jr. entered an emergency order May 14 freezing the defendants' assets and prohibiting the destruction or alteration of books and records.
According to the CFTC complaint, from about August 2009 and to the present, CTI Group and Cooper Trading -- by and through Symons, Kline, and others -- fraudulently solicited clients to subscribe to the Boomer and Victory Trading systems, which used by clients to trade E-mini Standard and Poor's 500 Stock Index futures contracts in managed accounts.
CTI and Kline, CFTC alleges, engaged and continue to engage in a systematic pattern of material false statements and omissions in connection with the marketing of CTI's Trading Systems to clients and prospective clients. CTI sells subscriptions to its Trading Systems for $5,000 to $6,000 and has sold subscriptions to more than 1,000 clients, receiving at least $11 million from the sale of its trading systems.
The CFTC states that CTI's misrepresentations and omissions in the sale of its Trading Systems allegedly concern:
-How long CTI has been in business;
-CTI's experience developing and marketing Trading Systems;
-The identities and professional experience of CTI's personnel (who use fictitious names when communicating with clients);
-The track record of CTI's Trading Systems;
-The past profitability of CTI's Trading Systems; and
-The transaction costs associated with trading via CTI's Trading Systems.
CTI's salespeople, says the CFTC, also made false statements to clients and prospective clients about CTI's purported money-back guarantee and misrepresented the risks associated with trading futures contracts using CTI's systems. The complaint further alleges that Symons and Kline controlled CTI and actively participated in CTI's unlawful conduct.