Russell Sands: A TurtleTrader Fined by the Government

Russell Sands: A TurtleTrader Fined by the Government
Russell Sands: A TurtleTrader Fined by the Government

Russell Sands Fined and Multiple Contradictions

Russell Sands (deceased; July 2019) first closed his fund declaring:

“I am writing to inform you that as of July 31, 2001, Pacific Turtle Fund has liquidated all open positions, and has stopped trading in the futures markets. Unless I receive a response from a majority of you to the contrary, there are no plans to resume trading of any kind at this point, and instead we will be seeking an orderly dissolution of the company, and a return of all monies to the investors, as quickly and expeditiously as possible. The reasons for this decision are many, but the primary factor is that we simply have not made any money in almost three years. After getting off to a profitable start the first year, the fund is now showing a negative return of about ten percent since inception. I think that the trading game has somehow fundamentally changed, and that long-term trend following is no longer a viable approach to extracting profits from either the futures or equity markets.”

Russell Sands was also fined by the National Futures Association on multiple occasions:

January 15, Chicago – National Futures Association ordered Turtle Futures, Inc. and Russell J. Sands to pay a joint fine of $20,000. Turtle is an introducing broker (IB) Member of NFA located in Boca Raton, Florida. Sands is an associated person and principal of Turtle. Following a hearing, an NFA Hearing Panel found that Turtle and Sands used promotional material that was deceptive, misleading and unbalanced and which failed to clearly identify performance results as hypothetical or include the required hypothetical disclaimer. The Hearing Panel dismissed two counts in the Complaint which alleged that Turtle and Sands failed to obtain acknowledgements from Turtle’s IB customers that they had received a disclosure document from Turtle Talk, Inc. and/or Sands and that Turtle conducted business with a non-Member of NFA.

Later, Sands declared his intentions to switch from trading to flying casinos:

“I am afraid that it’s very possible that with the advent of computers and faster information flows, the markets have fundamentally changed for good, and that it may no longer be possible for traders like myself to find market opportunities and exploit pricing inefficiencies in order to extract consistent profits from the game. To tell you the truth, the only way I have earned any money in the past couple of years has been by playing blackjack. Now, it just turns out that I have been given an opportunity to help start up a local firm that is attempting to break into the casino junket business. Basically, this firm will act as a middleman, finding and recruiting qualified players, and then sending them on trips to various different casinos around the world. The players will get free rooms, meals, shows, etc. (based on their casino play), the company will get a commission rebate from the casino, and everybody ends up happy. But my company is going to do much more than this. The CEO, Bill Forhan, is an experienced financial professional, having worked several years for American Express Incentive Travel Company, as well as starting and managing both private firms and public OTC Bulletin Board companies. Bill has a lot of investment banking knowledge and contacts, and wants to build this new company up into something really special. There are actually four different objectives and goals that we are striving to achieve, all of which are designed to complement each other with a high degree of synergy. The first, of course, is to find and recruit players and send them to the casino, in return for a commission. Secondly, and in conjunction with the first goal, we are interested in buying the existing operations of several well known and established firms in this industry, firms that already have defined player customer lists, and in fact have already signed a letter of intent to sell to us. Our third goal is to purchase an existing company called Casino Air Link. This is an airline that specializes in servicing several major casino gambling jurisdictions, with both public flights and private charters. In addition to being a natural avenue for sending groups of players on various casino trips, the airline currently is an existing profitable company in and of itself, and thus will be a real asset on the books of our company if we are able to buy them out. Finally, our ultimate goal is to take this company public, and have it trade on the Nasdaq, or OTC Bulletin Board. The easiest way for us to accomplish this goal is to purchase an existing public corporate shell, and then reverse merge into it, which will give us an instant listing, and credibility in the capital markets. Therefore, we have decided to raise money on our own with a private stock offering, which will initially consist of two and a half million shares of common stock at fifty cents per share. The money raised will be used for both immediate working capital and for the acquisitions previously described. And while I will be the first to admit that this is a risky deal, the upside potential is getting in on the ground floor of a company that will eventually go public and become a leader in it’s industry. All of the principals involved have committed a large amount of their time and money to make this whole thing work, but we cannot do it alone. All business and investment decisions come down to a trade-off between risk and reward. The markets have not co-operated with my trading style, or anybody else’s for that matter, for a long time now. And even if things turned around, I do not think there is the potential for the big trading gains that we used to see.”

A Turtle quoted in the Chicago Tribune noted the chaos:

“[Russell Sands] is not a good trader. His results have been pretty poor. I don’t think Russell has anything to say that’s worth $2,500.”

More on Russell Sands.

Trend Following Products

Review trend following systems and training:

Michael Covel Trend Following Products
Michael Covel Trend Following Products