U.S. Regulators Crack Down on Internet Fraud. Washington, May 1 (Bloomberg) -- Federal regulators are
forcing 14 Internet companies peddling ``get rich quick'' schemes
to change their advertising and sales pitches, in a sweep aimed at
sending a message against Internet fraud.
The Commodity Futures Trading Commission settled fraud
charges against 10 Web sites that promised customers big profits
if they used the sites' futures trading software or services.
The Federal Trade Commission acted against three sites offering
easy money from day trading, one of them jointly with the CFTC,
and the Securities and Exchange Commission settled a case against
one site.
The Internet is the latest avenue for con artists to reach
their potential victims, pitching foreign currencies, work-at-home
scams, stock fraud and other schemes, regulators said.
``People who push day trading systems or services as a sure
way to make money are peddling pipe dreams,'' said Jodie
Bernstein, director of the FTC's bureau of consumer protection.
``Day trading is a high-risk venture that's likely to leave
investors high and dry.''
Some Internet companies said customers could earn six- or
seven-figure incomes from day trading, in which investors buy and
sell a stock or other asset in a short time frame, the FTC said.
The companies hawked products such as online training, manuals,
newsletters, mentoring services and software programs.
``Today's actions by the CFTC should help remind consumers to
be very skeptical when someone promises amazing investment profits
with little or no risk,'' CFTC Chairman William J. Rainer said.
Some site operators claimed that they made returns of over
300 percent when the trading was merely hypothetical, said Phyllis
Cela, acting CFTC enforcement director.
``The real point of all these cases is that the site be
cleaned up (and) send a really crisp message,'' she said, noting
that half of the wrongdoers will pay ``a modest fine.''
Government officials have coordinated their efforts in two
public sweeps of the Internet for bogus claims of investment
opportunities and other fraud, as well as joint behind-the-scenes
legal action.
In March, agencies from 28 countries used popular Internet
search engines to find 1,600 sites offering a myriad of suspicious
schemes. About 40 percent of those sites shut down or changed
their pitches after authorities sent warnings over e-mail, U.S.
regulators said.
--Katherine M. Reynolds in Washington (202) 624-1934 or |
