"Teach Me to Trade"
(TMTT) Stock Trading System
March 11, 2008 - The Securities and
Exchange Commission filed civil fraud charges against two promoters who
illegally made millions selling a get-rich-quick stock trading system they
touted on TV and at investor workshops at hotels in dozens of cities nationwide.
The Commission's
complaint alleges that Linda Woolf and David Gengler, both of Utah, 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.
"The
allegations depict a cold-hearted scheme that preyed on the elderly, the
desperate, and even the unemployed by promising financial security while instead
robbing victims blind," said SEC Chairman Christopher Cox. "The Commission's
charges should send a warning to all those who would masquerade as successful
traders on TV while prowling the country for victims."
Linda
Chatman Thomsen, Director of the SEC's Enforcement Division, added, "The
evidence shows they callously urged customers to go into debt to purchase
expensive products and services. Today's charges make clear that we will hold
accountable those who prey on seniors and other investors."
The
Commission's complaint alleges that at their workshop presentations between 2003
and 2006, Woolf and Gengler made false and misleading statements to sell TMTT
packages of personal mentoring, software and classes ranging in price from
approximately $11,000 to $40,000. According to the Commission's complaint, Woolf
and Gengler also appeared in television infomercials portraying themselves as
successful former TMTT customers, with Woolf targeting retirees, among others.
In his workshops, Gengler urged investors to borrow against their retirement
accounts to follow TMTT strategies.
Through
false stories of their own trading success and bogus claims of a 96.5 percent
success rate for TMTT students who purchased personal mentoring, courses and
software, Woolf and Gengler convinced attendees that they, too, would make
extraordinary profits in the stock market if they followed TMTT's trading
strategies that emphasized options trading and short-term swing trading.
In one
infomercial, for example, 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.
The
Commission's complaint against Woolf and Gengler seeks disgorgement of their
ill-gotten gains, civil money penalties and permanent injunctions enjoining the
defendants from violating the antifraud provisions of the federal securities
laws.
In a
related action, the U.S. Attorney's Office for the Eastern District of Virginia
today announced the filing of an indictment against Woolf and Gengler.
The
Commission acknowledges the assistance of the U.S. Attorney's Office for the
Eastern District of Virginia, the U.S. Postal Inspection Service, the Federal
Bureau of Investigation and the Florida Attorney General's Office.
The
Commission's investigation is continuing.
