I thought some of you might be interested to know that Wade Cook has been indicted.
http://www.washingtonpost.com/wp-dyn/articles/A49311-2002Feb21.html
WASHINGTON ââ Federal regulators want investing guru Wade Cook and his financial seminar service held in contempt for failing to refund millions of dollars to customers.
The Federal Trade Commission said Thursday it had asked a federal judge to order Cook and his service to pay $5 million to a refund program for people who lost money following his advice.
"They've continued to make claims of returns of 20 percent per month if you take their course and they just don't have proof of that," said Bob Schroeder, a director with the FTC's Seattle office.
Cook's corporate counsel, Tim Jennrich, said the company was "shocked and upset" by the FTC action. "The company believes it is in compliance with the consent decree negotiated with the FTC and the various states," he said. "In fact, the company believes it has gone above and beyond the terms of the consent decree in addressing the FTC's needs.
"We have continued to post our rate of return in covered advertising and promotional materials, have worked closely with the FTC to fulfill the terms of the consumer redress program and have made every effort to apprise consumers about the risks inherent in the stock market."
Federal investigators estimate about 50,000 people across the country each paid between $3,000 and $5,000 to attend Cook's "Wall Street Workshop" between 1997 and 1999. Thousands more have signed up since then, Schroeder said.
In 2000, the FTC accused Cook of misleading investors into believing that he got rich by following certain stock-trading strategies. Cases also were filed by state attorneys general in Alaska, Arizona, California, Idaho, Illinois, Kansas, Missouri, New Mexico, North Carolina, Oregon, Pennsylvania, Texas, Washington and Wisconsin.
A settlement that year required the service to stop using deceptive practices and provide all workshop attendees with refund claim forms.
At the time, Cook, who is based near Seattle, admitted no wrongdoing but agreed to change his business practices.
Since then, the FTC said, Cook has failed to live up to the agreement.
Schroeder said that while Cook's service softened the earnings claims in its promotional materials, speakers at the seminars continued to make unfounded statements, telling attendees they could become millionaires in three years with a $1,700 investment.
The FTC said Cook's service also failed to provide refunds to customers who requested them. The company also used the wrong return address on claim notices, causing more than half of those eligible for refunds to mistake the claim forms for junk mail and throw them away, the agency said.
The FTC said it wants the original settlement enforced and an administrator appointed to oversee the refund program. The agency also asked for the refund notices to be mailed out again and the refunds extended to include people who paid for the seminars after October 2000.
The 14 states that sued Cook's service settled their cases in 2000 and so far have taken no additional action, Schroeder said.
The FTC request for a contempt order was filed Wednesday in the Federal District Court for the Western District of Washington. The request names Cook and his companies, Wade Cook Financial Corporation and Stock Market Institute of Learning Inc., the successor to Wade Cook Seminars Inc
http://www.washingtonpost.com/wp-dyn/articles/A49311-2002Feb21.html
WASHINGTON ââ Federal regulators want investing guru Wade Cook and his financial seminar service held in contempt for failing to refund millions of dollars to customers.
The Federal Trade Commission said Thursday it had asked a federal judge to order Cook and his service to pay $5 million to a refund program for people who lost money following his advice.
"They've continued to make claims of returns of 20 percent per month if you take their course and they just don't have proof of that," said Bob Schroeder, a director with the FTC's Seattle office.
Cook's corporate counsel, Tim Jennrich, said the company was "shocked and upset" by the FTC action. "The company believes it is in compliance with the consent decree negotiated with the FTC and the various states," he said. "In fact, the company believes it has gone above and beyond the terms of the consent decree in addressing the FTC's needs.
"We have continued to post our rate of return in covered advertising and promotional materials, have worked closely with the FTC to fulfill the terms of the consumer redress program and have made every effort to apprise consumers about the risks inherent in the stock market."
Federal investigators estimate about 50,000 people across the country each paid between $3,000 and $5,000 to attend Cook's "Wall Street Workshop" between 1997 and 1999. Thousands more have signed up since then, Schroeder said.
In 2000, the FTC accused Cook of misleading investors into believing that he got rich by following certain stock-trading strategies. Cases also were filed by state attorneys general in Alaska, Arizona, California, Idaho, Illinois, Kansas, Missouri, New Mexico, North Carolina, Oregon, Pennsylvania, Texas, Washington and Wisconsin.
A settlement that year required the service to stop using deceptive practices and provide all workshop attendees with refund claim forms.
At the time, Cook, who is based near Seattle, admitted no wrongdoing but agreed to change his business practices.
Since then, the FTC said, Cook has failed to live up to the agreement.
Schroeder said that while Cook's service softened the earnings claims in its promotional materials, speakers at the seminars continued to make unfounded statements, telling attendees they could become millionaires in three years with a $1,700 investment.
The FTC said Cook's service also failed to provide refunds to customers who requested them. The company also used the wrong return address on claim notices, causing more than half of those eligible for refunds to mistake the claim forms for junk mail and throw them away, the agency said.
The FTC said it wants the original settlement enforced and an administrator appointed to oversee the refund program. The agency also asked for the refund notices to be mailed out again and the refunds extended to include people who paid for the seminars after October 2000.
The 14 states that sued Cook's service settled their cases in 2000 and so far have taken no additional action, Schroeder said.
The FTC request for a contempt order was filed Wednesday in the Federal District Court for the Western District of Washington. The request names Cook and his companies, Wade Cook Financial Corporation and Stock Market Institute of Learning Inc., the successor to Wade Cook Seminars Inc
