Tuesday, March 11, 2008
I have often wondered why there was not a crackdown on the infomercials shown on television and other"investor workshops." The SEC today filed civil fraud charges against Linda Woolf and David Gengler, two promoters who allegedly made millions selling a get-rich-quick stock trading system. (If you go to its website, you can see videos of the sales pitch.) The SEC alleges that they duped seniors and others who had attended free introductory seminars into believing they would make extraordinary stock market profits if they bought expensive "Teach Me to Trade" (TMTT) classes, mentoring, and computer software. In order to con victims into paying as much as $40,000 for TMTT products and services, the Commission alleges that Woolf and Gengler lied about their success with the trading system, when in truth neither Woolf nor Gengler ever purchased TMTT's products or became successful traders.
In one infomercial Woolf told how she used to be an elementary school teacher and was able to replace her entire income after attending TMTT workshops. "I had no idea it was that easy to learn how to make money in the stock market," Woolf said. In another infomercial, Gengler claimed, "If you can simply follow steps and follow our principles, you'll make money. It's that simple." Instead, the Commission alleges, Woolf and Gengler are unsuccessful traders, with Woolf having never declared a trading profit on her federal tax returns and Gengler typically declaring losses, or no profits. However, Woolf reaped approximately $4 million in commissions from selling TMTT packages, and Gengler made approximately $2.25 million, according to the Commission's complaint.