Wade Cook Says It's Trying to Settle Marketing Case With FTC
Seattle, March 31 Bloomberg) -- Wade Cook Financial Corp.
said it's trying to negotiate a settlement with the Federal Trade
Commission to prevent the FTC from filing charges against the
financial seminar company over to its marketing practices.
The company, which runs seminars on how to get rich trading
stocks, said a settlement would include an order governing its
future advertising and set up a mechanism for customer refunds --
but said it couldn't predict if a settlement will be reached.
An FTC spokeswoman declined to comment, citing agency policy.
The Seattle-based company said bad press from continuing
investigations by the attorney generals of 10 states and the FTC
into its marketing practices and the truth of its advertising
claims have hurt its financial results. Texas and California have
already filed suit, seeking refunds for customers.
Wade Cook's outside auditor, Miller and Co. LLP, said there
was 'substantial doubt' about the company's ability to continue
as a going concern.
The company lost $4 million, or 6 cents a share, in the
fourth quarter of 1999, compared with a profit of $378,000, or 1
cent a share, in the same year-earlier period as attendance at its
seminars waned, Wade Cook said in its 10-K annual report to the
Securities and Exchange Commission.
In 1999, the company, which is 65 percent owned by Chief
Executive Wade Cook, conducted 2,700 investment seminars, down
from 3,737 in 1998. Cook is the author of investment advisory
books published by the company including ``Wall Street Money
Machine.' His 1999 royalties fell 62 percent to $2 million from
$7.8 million in 1998.
In December, Wade Cook Financial borrowed $3 million, using
its headquarters building in suburban Seattle as collateral, to
pay back taxes owed to the Internal Revenue Service.
Wade Cook Financial shares rose 1 cent to 34 cents in early
trading. In September 1997, they traded at 5 1/2.
--David Evans in Los Angeles (310) 910-8811 through the New York
newsroom/dp
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