WASHINGTON, DC – September 27, 2016 – The U.S. Commodity Futures Trading Commission (CFTC) today announced a settlement with James Reynolds, operating through his company Advanced Trading Workshop, Inc. (ATW), based in Jamesville, New York, for engaging in fraudulent solicitation and failing to register as a Commodity Trading Advisor (CTA). ATW later changed its name to Sniper Scalping, Inc. in November 2013.
The CFTC order requires Reynolds and ATW to disgorge $470,000 in ill-gotten gains and pay a $470,000 civil monetary penalty. Additionally, a permanent ban has been imposed on ATW, prohibiting it from trading, soliciting, or registering with the CFTC. The order mandates that ATW cease and desist from violating the Commodity Exchange Act (CEA) and CFTC Regulations.
According to the CFTC, from approximately August 2012 to at least June 2013, Reynolds, through ATW, solicited public members to purchase access to a service called the “Real Time Trade Room” (the Room). This online forum was advertised as a learning platform where clients could observe an ATW trader – referred to as “the Trader” – and learn futures contract trading by observing his techniques. ATW promoted the Room as allowing clients to “look over the shoulder” of an experienced professional trader.
ATW claimed the Trader executed “live” futures contracts within the Room, allowing clients to witness order entry and results. Promotional materials described the Trader as a “master trader,” “at the absolute pinnacle of his profession,” and “incredibly successful.” However, the CFTC found that these claims were demonstrably false. The Trader never actually traded futures contracts in the Room, only engaging in hypothetical or simulated trading, and never realizing any trading profit. Furthermore, the Trader’s limited trading in his personal account was unprofitable.
The CFTC asserts that simulated trading differs materially from actual trading, potentially misrepresenting market impacts such as liquidity. Reynolds either knew the statements regarding the Trader’s experience and live trading were false or misleading, or acted with reckless disregard for their truth. The order also determined that ATW provided trading advice, functioning as an unregistered CTA by advising clients on futures contracts for compensation.
Source: CFTC.gov
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