Warrior Trading head office at 47 Railroad Street in Great Barrington. Photo: Terry Cowgill
SPRING FIELD – A Great Barrington-based stock trading company has agreed to pay a $3 million fine after a federal investigation found that Warrior Trading executives “made baseless claims about consumers being able to make money using their trading strategies”.
“Warrior Trading is paying a heavy price for misleading consumers with false tax returns,” Samuel Levine, director of the Federal Trade Commission’s (FTC) Consumer Protection Bureau, said in an April 19 written statement announcing the fine. “The FTC will continue its crackdown on false tax returns and false opportunities.”
The fine was the result of a civil complaint the FTC had filed against Warrior and its CEO, Ross Cameron, “in relation to the deceptive and unlawful advertising marketing, promotion, distribution and sale of day-trading strategies. and related goods and services to consumers throughout the U.S. Under the monetary order and judgment, which the commission unanimously approved, Warrior neither admits nor denies any of the allegations in the complaint.
Founded in 2014 in Vermont, Warrior promotes online day-trading investments, to sell a business strategy that will show consumers “how to profit from the markets”, Cameron told The Edge after moving the company to Great Barrington in 2018.
From 2018 to 2021, according to the FTC, the company earned tens of millions of dollars selling its programs online, while spending $12.8 million on advertising. The $3 million settlement aims to “reimburse consumers and [Warrior Trading] It will be prohibited to make unsubstantiated claims about consumers’ ability to make money using their trading strategies,” the FTC said.
The FTC’s complaint alleges that Warrior Trading’s ad “presented Cameron’s trading results,” suggesting that his strategies were both “profitable” and “scalable.”
To be clear, the FTC is not alleging that the contents of the statements in the ad are false. Rather, the commission alleges that accurate statements about Cameron’s stock market performance suggest that his students or clients will experience similar success — an implication the FTC calls “misleading.”
Warrior Trading has deployed misleading income statements throughout its sales pitch in violation of the FTC Act and the Telemarketing Sales Rule, which requires specific disclosure of material information and prohibits misrepresentation, among other things.
The FTC defines day trading as “a form of investing in which consumers buy and sell stocks at very short intervals throughout the day, hoping to make a profit during the very short periods in which they may hold shares in a particular company”.
Under the FTC Act and the Telemarketing Sales Rule, the FTC has the authority to take action against companies that violate consumer protection laws, including engaging in unfair or deceptive acts or practices. Stipulated final orders such as the one issued by the FTC against Warrior Trading do not have the force of law until approved and signed by the District Court Judge.
Under the court order accepted by the FTC and Warrior Trading, defendants must pay $3 million to consumers “harmed” by its actions, “close false revenue claims,” and refrain from “making false telemarketing statements about investment opportunities, including the income potential or level of risk a consumer might face. »
The FTC filed the proposed order in the U.S. District Court for the Western District of Massachusetts in Springfield. The commission was assisted by the United States Securities and Exchange Commission.
Contacted by The Edge, Cameron posed questions to his attorney, Nick Morgan of Paul Hastings LLP, a global law firm specializing in white-collar crime and government disputes. Morgan declined to comment.
Warrior released a statement on the company’s website earlier this week. Click here to read it in full:
“We have always strived to use transparent disclaimers that communicate risk in trading and that Ross profits are not a typical outcome. In our settlement, we agreed to go further with new forms of risk communication and the expansion of our disclaimers. »
More than two years ago, Cameron bought the abandoned Castle Street fire station. This building, located just around the corner from Warrior’s current office at 47 Railroad Street, will eventually house Warrior and Tire Kickers, a future dealership owned by Cameron, a self-proclaimed “enthusiast for anything with wheels.”