Russell Sands was recently fined $45,000. Details follow.
COMPLAINT: On June 30, 2010, NFA issued a Complaint charging TFI and Russell Sands with using deceptive and misleading promotional material which failed to clearly label hypothetical performance as hypothetical and failed to include the required hypothetical disclaimer; using deceptive and misleading promotional material which exaggerated the profit potential and downplayed the risk of loss of trading commodities; using deceptive and misleading promotional material that attempted to minimize the significance of NFA’s earlier disciplinary Complaint; and using deceptive and misleading promotional material which failed to state that testimonials are not indicative of future performance and that all gains touted in the testimonials were not representative of all reasonably comparable accounts.
ANSWER: On September 3, 2010, TFI and Russell Sands filed an Answer to the Complaint in which they denied the material allegations contained therein.
DECISION: On January 20, 2011, pursuant to a settlement offer submitted by TFI and Russell Sands, TFI and Sands were ordered to pay a $45,000 fine. In addition, TFI and Sands were ordered to pre-submit all promotional material to NFA prior to first use for three years. This includes all material used by Sands’ Entities. Further, TFI and Sands were ordered to pre-submit all promotional material used by any Third-Party Marketers to NFA for approval prior to its first use for three years. TFI, Sands and Sands’ Entities were also ordered to provide to NFA a list of Third-Party Marketers with whom they transact business and update this list during the Pre-Review Period. Finally, TFI, Sands and Sands’ Entities were ordered to only transact business with those Third-Party Marketers which use promotional material to promote Turtle Products, if such promotional material is approved by NFA during the Pre-Review Period.
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