SPRINGFIELD — A Great Barrington-based stock trading company has agreed to pay a $3 million fine after a federal investigation concluded that Warrior Trading executives were “making baseless claims about the potential for consumers to earn money using their trading strategies.”
“Warrior Trading is paying a heavy price for misleading consumers with bogus money-making claims,” Samuel Levine, director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection, said in an April 19 written statement announcing the fine. “The FTC will continue its crackdown on false earnings claims and phony opportunities.”
The fine was the result of a civil complaint the FTC had filed against Warrior and its CEO, Ross Cameron, “in connection with the deceptive and unlawful advertising marketing, promoting, distribution, and selling of day-trading strategies and related goods and services to consumers throughout the United States.” According to the order and monetary judgment, which the commission approved unanimously, Warrior neither admits nor denies any of the allegations in the complaint.
Founded in 2014 in Vermont, Warrior promotes day-trading investments online, to sell a trading strategy that will show consumers “how to make a profit in the markets,” Cameron told The Edge after he relocated the company to Great Barrington in 2018.
From 2018 to 2021, the FTC says, the company made tens of millions of dollars selling its programs online, while spending $12.8 million on advertising. The $3 million settlement is “to refund consumers and [Warrior Trading] will be prohibited from making baseless claims about the potential for consumers to earn money using their trading strategies,” the FTC said.
The FTC’s complaint alleges that Warrior Trading’s advertising “showcased the trading results of Cameron,” suggesting that his strategies were both “profitable” and “scalable.”
To be clear, the FTC does not allege that the content of statements in the advertising are false. Rather, the commission alleges that the accurate statements about Cameron’s own stock performance suggest that his students or customers will have similar success — an implication the FTC characterizes as “misleading.”
Warrior Trading deployed deceptive earnings claims throughout its sales pitch in violation of the FTC Act, and the Telemarketing Sales Rule, which requires specific disclosures of material information and prohibits misrepresentations, among other things.
The FTC defines day trading as “a form of investing where consumers buy and sell stocks over very short intervals throughout the day, hoping to make profit during the very short times in which they may own shares in a particular firm.”
Under the FTC Act, and the Telemarketing Sales Rule, the FTC has the authority to take action against companies violating consumer protection laws, including engaging in unfair or deceptive acts or practices. Stipulated final orders such as the one issued by the FTC against Warrior Trading have the force of law only when approved and signed by the District Court judge.
Under the court order agreed to by the FTC and Warrior Trading, the defendants must pay $3 million to consumers “harmed” by its actions, “shut down bogus earning claims” and refrain from “making any misrepresentations through telemarketing about investment opportunities, including the earnings potential or amount of risk a consumer might face.”
The FTC filed the proposed order in the U.S. District Court for the Western District of Massachusetts in Springfield. The commission was assisted by the U.S. Securities and Exchange Commission.
Contacted by The Edge, Cameron referred questions to his attorney, Nick Morgan of Paul Hastings LLP, a global law firm that specializes in white collar crime and government disputes. Morgan declined to comment.
Warrior did post a statement on the company’s website earlier this week. Click here to read it in its entirety:
“We have always strived to use transparent disclaimers that communicate the risk in trading and the fact that Ross’s profits are not a typical result. In our settlement we have agreed to take it a step further with new forms of communicating risk and the expansion of our disclaimers.”
More than two years ago, Cameron bought the derelict Castle Street firehouse. That building, located just around the corner from Warrior’s current office at 47 Railroad Street, will eventually house Warrior and Tire Kickers, a soon-to-be dealership owned by Cameron, a self-described “enthusiast of anything with wheels.”
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