FTC Sues Irvine Stock Trader, Saying Claims Are Deceptive
The Federal Trade Commission sued an Irvine stock-trading advisor Monday, accusing his firm of false and deceptive advertising.
The FTC is asking the U.S. District Court in Santa Ana to order Timothy Cho and Tim Cho Investment Corp. to stop making false claims about day trading in the company’s investment seminars and to “provide consumer redress or give up their ill-gotten gains.”
Cho denied the FTC charges and said he plans to fight them in court.
It’s the seventh such lawsuit filed by the FTC since May, when it began a crackdown on deceptive trading practices, working with the Commodity Futures Trading Commission and Securities and Exchange Commission.
Since then, the FTC said, courts have halted the claims of 14 online firms that promised to share the secrets of making easy money with little risk.
In the latest case, the agency said, Cho advertised a $6,000, two-day training seminar on trading stocks, currencies and Standard & Poor’s futures contracts.
The FTC said Cho’s ads deceptively claimed, among other things, that the course would enable traders to clear a profit of up to 18% per trade, to earn more than $1 million a year and to get a guaranteed 1,000% return in trading S&P; futures contracts within one year.
The ads “conveyed that investors can expect to trade profitably with little financial risk,” the FTC said.
The agency wants a court order stopping the firm from making such claims and forcing “disgorgement” of “ill-gotten gains.”
Cho said the FTC had taken material from his company’s Web site out of context and “manipulated” it so it looks false and misleading.
“We can prove everything that we advertise,” Cho said. He said that only a fraction of the company’s 140-page manual is devoted to day trading. He said the company Web site contains disclosures and disclaimers warning students that they may not ring up big profits and could lose money instead.
And Cho stands by the claim that students can make $1 million a year. While many cannot do that well by day trading, he said, they can do it by becoming professional investors or money managers.
