Online Trading Academy Sued For Running An Investing Scam
Online trading scams are very common. You will find many claims from people that they are making a fortune using some system. To learn the system you need to pay up to $50,000. It turns out that most of these systems are scams taking advantage of people. Avoid investing scams.
The Federal Trade Commission has sued the California-based investment training scheme Online Trading Academy (OTA), led by Eyal Shachar. The FTC alleges that OTA uses false or unfounded earnings claims to sell “training programs” costing as much as $50,000. OTA has collected more than $370 million from consumers nationwide within the last six years.
According to the FTC, OTA misrepresents that it has a patented “strategy” that anyone can use to generate substantial income from trading in the financial markets. OTA claims that its strategy is designed to generate income in any market, “whether it’s going up, down or sideways.” The company’s claims are often targeted at older consumers. Additionally, OTA “instructors”—salespeople on commission who market OTA’s training and strategy to consumers in live events across the county—often hold themselves out as successful traders who have amassed substantial wealth using OTA’s strategy.
However, OTA does not track the trading results of its customers, and the FTC alleges that OTA’s own surveys indicate that its customers are not making the type of income OTA advertises. Trading data from a platform used by OTA customers also suggest that the vast majority of OTA’s customers do not make any money, and many lose money on top of the money they pay OTA. Evidence obtained by the FTC also indicates that instructors’ claims of amassing wealth by using OTA’s strategy are false or unsubstantiated.
“It is illegal to make earnings claims in marketing investment opportunities or training, unless the seller has a reasonable basis to make such claims,” said Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection. “OTA has used unfounded earnings claims to bilk Americans out of their savings.”
Here are some of the key details from the lawsuit:
Operating under the name “Online Trading Academy” (“OTA” (alternatively meaning the “Corporate Defendants” collectively)) and led by Eyal Shachar, Defendants purport to teach consumers how to “invest like the pros on Wall Street.” Defendants claim to show their “students” how to find “low-risk, high-potential investing opportunities” by applying a “patented strategy to any
asset class including stocks, options, futures and currencies.”
Defendants target older consumers “with visibility to retirement age, near retirement or retired.” To convince consumers to pay thousands and often tens of thousands of dollars for OTA’s training and related services, Defendants routinely represent, directly or by implication, that purchasers are likely to generate substantial income with OTA’s trading strategy. Typical examples include:
- A letter from OTA’s CEO and owner, Eyal Shachar, promising that OTA “students” will “be introduced to Online Trading Academy’s patented supply and demand trading and investing strategy which allows us to anticipate market moves with a high degree of accuracy.”
- A promotional video featuring a retiree who purportedly used OTA’s trading strategy to create “a retirement income that was bigger than his income while he was working,” including “$40,000 in a single trade.”
- A testimonial from a purported OTA customer stating, “It took me 18 years to develop a decent salary. After three months here at OTA, I’m making almost as much money as my business.”
- The story of Jasmine Wang, an OTA employee, who purportedly grew a $12,000 trading account to $128,000 in nine months.
Defendants have routinely claimed that consumers who purchase OTA training programs can quickly attain proficiency in OTA’s strategy and deploy it to earn substantial income, regardless of their background and prior experience.
Defendants’ earnings claims are false or unsubstantiated. OTA’s strategy does not work as advertised, Defendants do not track the trading performance of their customers, and Defendants have no data that would allow them to predict the trading performance of their customers.
Many dissatisfied customers have requested refunds of the monies they paid for OTA’s training. In numerous instances, when Defendants agree to honor a refund request, they condition the refund on the consumer signing an agreement barring the consumer from posting negative reviews about OTA and its services, and from providing negative information about OTA and its employees, including potential law violations, to law enforcement agencies.
Defendants have collected hundreds of millions of dollars from numerous consumers across the country. In perpetrating their scheme, they have violated the FTC Act and the Consumer Review Fairness Act.
The defendants in the case include OTA Franchise Corp, Newport Exchange Holdings, NEH Services, Inc., Eyal Shachar (also known as Eyal Shahar), Samuel Seiden, and Darren Kimoto. They are charged with violating the FTC Act and the Consumer Review Fairness Act.
– Source FTC