COMPLAINT #1:

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.

DECISION #1:

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.

COMPLAINT #1:

On SEPTEMBER 19, 1997, NFA’S BUSINESS CONDUCT COMMITTEE (“COMMITTEE”) ISSUED a COMPLAINT to TURTLE FUTURES, INC. (“TURTLE FUTURES”), RUSSELL J. SANDS (“SANDS”), LFG LLC (“LFG”) and JOHN E. YACKLEY (“YACKLEY”). The COMPLAINT ALLEGES THAT TURTLE FUTURES, SANDS and LFG USED DECEPTIVE, MISLEADING and UNBALANCED PROMOTIONAL MATERIAL WHICH FAILED to CLEARLY IDENTIFY PERFORMANCE RESULTS as HYPOTHETICAL and FAILED to INCLUDE the REQUIRED HYPOTHETICAL DISCLAIMER, in VIOLATION of NFA COMPLIANCE RULES 2-29(B)(1) THROUGH 2-29(B)(3), 2-29(C) and 2-29(F). The COMPLAINT ALSO ALLEGES THAT YACKLEY USED DECEPTIVE and MISLEADING PROMOTIONAL MATERIAL, in VIOLATION of NFA COMPLIANCE RULES 2-29(B)(1) and (2). In ADDITION, the COMPLAINT ALLEGES THAT TURTLE FUTURES, SANDS and LFG FAILED to OBTAIN ACKNOWLEDGMENTS FROM CUSTOMERS INDICATING RECEIPT of a DISCLOSURE DOCUMENT, in VIOLATION of NFA COMPLIANCE RULE 2-8(E)(2). FURTHERMORE, the COMPLAINT ALLEGES THAT TURTLE FUTURES DID BUSINESS WITH a NON- MEMBER of NFA, in VIOLATION of NFA BYLAW 1101. FINALLY, the COMPLAINT ALLEGES THAT LFG FAILED to SUPERVISE, in VIOLATION of NFA COMPLIANCE RULE 2-9. On SEPTEMBER 19, 1997, NFA’S BUSINESS CONDUCT COMMITTEE (“COMMITTEE”) ISSUED a COMPLAINT to TURTLE FUTURES, INC. (“TURTLE FUTURES”), RUSSELL J. SANDS (“SANDS”), LFG LLC (“LFG”) and JOHN E. YACKLEY (“YACKLEY”). The COMPLAINT ALLEGES THAT TURTLE FUTURES, SANDS and LFG USED DECEPTIVE, MISLEADING and UNBALANCED PROMOTIONAL MATERIAL WHICH FAILED to CLEARLY IDENTIFY PERFORMANCE RESULTS as HYPOTHETICAL and FAILED to INCLUDE the REQUIRED HYPOTHETICAL DISCLAIMER, in VIOLATION of NFA COMPLIANCE RULES 2-29(B)(1) THROUGH 2-29(B)(3), 2-29(C) and 2-29(F). The COMPLAINT ALSO ALLEGES THAT YACKLEY USED DECEPTIVE and MISLEADING PROMOTIONAL MATERIAL, in VIOLATION of NFA COMPLIANCE RULES 2-29(B)(1) and (2). In ADDITION, the COMPLAINT ALLEGES THAT TURTLE FUTURES, SANDS and LFG FAILED to OBTAIN ACKNOWLEDGMENTS FROM CUSTOMERS INDICATING RECEIPT of a DISCLOSURE DOCUMENT, in VIOLATION of NFA COMPLIANCE RULE 2-8(E)(2). FURTHERMORE, the COMPLAINT ALLEGES THAT TURTLE FUTURES DID BUSINESS WITH a NON- MEMBER of NFA, in VIOLATION of NFA BYLAW 1101. FINALLY, the COMPLAINT ALLEGES THAT LFG FAILED to SUPERVISE, in VIOLATION of NFA COMPLIANCE RULE 2-9.

DECISION – SANDS #2

On JANUARY 7, 1999, a DESIGNATED PANEL of NFA’S HEARING COMMITTEE ISSUED a DECISION to TURTLE, SANDS and YACKLEY AFTER a HEARING WAS HELD. The PANEL ORDERED TURTLE and SANDS to PAY a FINE of $20,000 for WHICH THEY ARE JOINTLY and SEVERALLY LIABLE. FURTHERMORE, the PANEL ORDERED SANDS, for a PERIOD of ONE YEAR, to SUBMIT ALL PROMOTIONAL MATERIAL PREPARED by HIM to NFA PRIOR to ITS FIRST USE. FINALLY, the PANEL DISMISSED WITH PREJUDICE the CHARGES AGAINST YACKLEY. THIS DECISION BECOMES EFFECTIVE JANUARY 22, 1999.

Read government report here. More details here.

Note: Russell Sands died July 2019.