ALEXANDRIA, VA – October 12, 2006 – Michael Hayes, a Virginia resident, is facing charges of commodity futures fraud following a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) in the United States District Court for the Eastern District of Virginia. The complaint, dated September 29, 2006, alleges that Hayes and his company, Coldwell Publishing, Inc., fraudulently promoted a commodity futures and options trading system.
Hayes, acting as the owner and sole employee of Coldwell Publishing, authored a book titled “The Insider’s Profit Matrix” (IPM) under the pseudonym Frank Richards. The CFTC alleges that Hayes fraudulently marketed this book as a viable trading system to the public.
Between 2001 and 2004, approximately 15,000 copies of the book were sold, generating over $1 million in revenue for Hayes and Coldwell. The complaint details that Hayes utilized misleading promotional materials, mass-mailed to potential customers, claiming the book contained a proven trading system.
Specifically, the CFTC contends that the performance records and profit results presented in the promotional materials were based on either hypothetical trading scenarios or were entirely fabricated. The materials also allegedly overstated the potential profits achievable with the system and failed to adequately disclose the inherent risks associated with futures and options trading. Furthermore, the promotional materials reportedly lacked the required cautionary statements regarding hypothetical performance results.
The CFTC argues that Coldwell Publishing is liable for Hayes’ actions, as they were conducted within the scope of his employment and agency with the company. The case is currently before Honorable Rebecca Beach Smith, United States District Judge.
The CFTC is seeking permanent injunctive relief, requiring Hayes and Coldwell to cease their fraudulent activities. They are also pursuing disgorgement of all profits gained from the deceptive advertising and civil monetary penalties to be determined by the court.
Source: CFTC.gov
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