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Trading Statements / Brokers / Liability / Fraud

I've kicked off a new thread/topic to address this issue because it appears to be an important one. This topic picks up from pages 2, 3 and 4 in this topic and I'll try and summarize the important points in quotes:

Jim: ...If you produce statements as part of a program for mentoring you are making an implicit claim that the person taking the course or mentorship will achieve similar results. It is not possible to claim that although you have demonstrated these results, the student may not, or even likely won't, achieve similar results. If you felt that, what is the point of the statements? To say you can do it, but if you take the course/mentorship, you won't? It's to imply the instructor/mentor has done it and if the program is taken, the student will to. That is how the courts look at this right now.

Again, I am not saying that is why all these vendors I see blasted in here don't provide statements. I am just saying that anyone who has a skilled attorney familiar with current trends in lawsuits would advise you not to post statements. Yet no one will even give this any credence. I suspect the mentors that actually can trade would not provide the statements for this reason. That means, to me, one needs another method for determining if the person can actually trade, if that is the goal. I would suggest asking them to trade live, in person, in front of you before committing to a mentorship. That would solve the problem. If they say no, then you can pass if you want...

Jim: I went back and read some more of the cases like what we are discussing here, and you know what the most common thing I saw was? Fake statements. Don't take my word for it, do the research yourself here, everyone. So, I got to wondering about if a broker would vouch for profitability of an account. I made some calls, since I didn't get any response back from anyone on my request to call their brokers and see what they say. Not a single one said they would do it.

They all said they simply can't talk about another's account with anyone who isn't the account owner or one who has power of attorney on the account. I asked if the owner couldn't give a blanket permission, written, for this, and they said they can't do it. I'm not saying there aren't brokers who could or would do this, only that the ones I contacted said they can't do it.
A few years ago I contacted Spike Trading Services and asked them the same question and got the same reply that you got but I was under the impression at that time that I could have had them verify any claims that I made but I could be wrong about that...
So it looks like there could be an enormous hole here. Easy to fake statements and no way to verify them. So that would put someone like Oliver in a predicament because even though he may have examined the statements there's no way for him to verify them.
It would be curious, DT, if you could ask Spike again now, because they are very progressive, and are used by many ML traders and others, and you are well-known yourself. Tell them what you are trying to do, and if they could do it. If they say yes, you could then post here that if any vendor wants to provide statements and use Spike, they would be willing verify the statements. You could say it might be a big selling point for them, or something to that effect. That would be a step forward for those asking for statements. Thoughts?
I'll talk to Spike again.

In the meantime I've been doing what you did and been reading the CFTC Web Site and think that it reads like a good crime novel.
I love watching Law & Order and take great pleasure when the criminals get caught and I'm guessing the the CFTC only publishes the cases that have been resolved so pretty much the same scenario.

I couldn't find any examples of people issuing false statements to solicit traders to work with them but there was one case about Christian Kis of Raptor Capital Inc where he subsequently issued false statements to cover his losses.

If anybody can find examples of what we're talking about then please post them here.
CFTC Commissioner Michael Dunn, who heads the CFTC’s Forex Task Force, commented:

The first line of defense against financial fraudsters is education, and that is why financial literacy is increasingly important for all Americans. Well-informed investors can protect their investing dollars from scams, and contribute to the integrity of the futures markets by making informed investing decisions.

I'm sure that a lot of losses have been saved by traders by reading some of the topics on this forum. The one that jumps to mind is obviously the Tsunami Trading topic.
Jim's suggestion to observe the mentor trading in his environment (not a shared desktop over the Internet) for a week is the best way to go about this, even if you have to travel a far distance costing you some bucks. Not only will you satisfy yourself the mentor can or can't trade, but you get to see the face behind the name. The stakes are high here and I wouldn't consider anyone who didn't agree to that requirement. The higher the fee, the greater the due diligence. Caveat Emptor.

You're probably not going to get to do that with any of the advertised Web-based teaching services with a realtime trading room who give a free trial, but that's a different discussion. However, I know someone who traveled to Iowa to meet with Blue Falcon of Falcon Day Traders before he would spend $7000 for the course only to learn that Blue didn't actually trade the calls he made in the room for his own account. Needless to say, my friend was a bit pissed, and didn't sign up.
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