[Federal Register Volume 68, Number 61 (Monday, March 31, 2003)]
[Notices]
[Pages 15454-15455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7609]


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FEDERAL TRADE COMMISSION

[File No. 992 3298]


The Ted Warren Corporation, et al.; Analysis to Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before April 23, 2003.

ADDRESSES: Comments filed in paper form should be directed to: FTC/
Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments filed in electronic form should be 
directed to: [email protected], as prescribed below.

FOR FURTHER INFORMATION CONTACT: Dan Salsburg or Stephen Gurwitz, FTC, 
Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, (202) 326-3402 or 326-3272.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and section 2.34 
of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for March 24, 2003), on the World Wide Web, at ``http://www.ftc.gov/os/2003/03/index.htm.'' A paper copy can be obtained from the FTC 
Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Comments filed in paper form should 
be directed to: FTC/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains 
nonpublic information, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``confidential.'' Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to email messages directed to the following 
email box: [email protected]. Such comments will be considered 
by the Commission and will be available for inspection and copying at 
its principal office in accordance with section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice, 16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from The Ted Warren 
Corporation, The Ken Roberts Institute, Inc., and The Ken Roberts 
Company, corporations, and Ken Roberts, as an officer of the 
corporations (together, ``respondents'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    Respondents advertise and sell materials (``Investment Courses'') 
that purport to teach purchasers how to profitably trade stocks, 
commodity futures and options, and real estate. The Investment Courses 
sold by respondents include the ``TWC Stock Course'' for trading 
stocks, the ``KRI Investment Portfolio'' for creating an investment 
portfolio, the ``KRC Commodity Course'' for trading commodity futures 
contracts and options, and the ``Jim Banks Probate Course,'' pursuant 
to a marketing agreement with J.G. Banks, Inc., for purchasing real 
estate and personal property through probate proceedings. Respondents 
have sold these Investment Courses through the Internet Web site http://www.kenroberts.net and related Web sites.

[[Page 15455]]

    This matter concerns respondents' allegedly deceptive 
representation that purchasers of the Investment Courses who make 
profitable ``paper trades''--practice trades in which no funds are 
actually invested--using techniques described in the Investment Courses 
during one time period are likely to make profitable actual trades when 
their funds are invested in the market during a later time period. This 
matter also concerns the respondents' alleged failure to disclose the 
risks associated with the trading techniques described in the 
Investment Courses.
    The proposed consent order contains provisions designed to prevent 
respondents from engaging in similar acts and practices in the future.
    Part I of the proposed consent order prohibits the respondents from 
misrepresenting that purchasers of ``investment courses'' who make 
profitable ``paper trades'' are likely to make profitable actual trades 
when their funds are invested in the market. The term ``investment 
courses'' is defined as ``any program, service course, instruction, 
system, training, manual, computer software, or other materials 
involving the purchase or sale of stocks, currencies, commodity 
futures, options, real estate through probate proceedings, or other 
financial instruments or investments.''
    Part II of the proposed consent order requires the respondents to 
make the following six risk disclosures:
    1. For all Investment Courses: ``WARNING: [FUTURES TRADING, STOCK 
TRADING, CURRENCY TRADING, OPTIONS TRADING, ETC., as applicable] 
involves high risks and YOU can LOSE a lot of money.''
    2. For all Investment Courses in which purchasers are advised or 
instructed to ``paper trade'' or otherwise practice making investments 
without investing actual funds: ``Being a successful PAPER TRADER 
during one time period does not mean that you will make money when you 
actually invest during a later time period. Market conditions 
constantly change.''
    3. For all Investment Courses involving securities or the 
purchasing of options: ``When investing in [securities or the 
purchasing of options, as applicable] you may lose all of the money you 
invested.''
    4. For all Investment Courses involving futures or the granting of 
options: ``When investing in (futures or the granting of options, as 
applicable) you may lose more than the funds you invested.''
    5. For all Investment Courses involving futures and commodity 
options: ``Trading in commodity futures or options involves substantial 
risk of loss. According to many experts, most individual investors who 
trade commodity futures or options lose money.''
    6. For all Investment Courses in which claims are made regarding 
past performance: ``Past Results are not necessarily indicative of 
Future Results.''
    Parts III and IV of the proposed order require respondents to keep 
copies of relevant advertisements and materials substantiating claims 
made in the advertisements and to provide copies of the order to 
certain personnel. Part V requires TWC, KRI and KRC to notify the 
Commission of any changes in their corporate structures that might 
affect compliance with the order. Part VI requires that the individual 
respondent notify the Commission of changes in his employment status 
for a period of ten years. Part VII requires TWC, KRI and KRC to file 
compliance reports with the Commission. Part VIII provides that the 
order will terminate after twenty (20) years under certain 
circumstances.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

By Direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 03-7609 Filed 3-28-03; 8:45 am]
BILLING CODE 6750-01-P