CFTC files complaint against CTA Neal Hall and

UPDATE: The CFTC has published its complaint and companion press release against Neal Hall. The brief alleges that Hall offered services comparable to those performed by a CTA, though he never registered as one. Furthermore, he made extensive use of anonymous customer testimonials and “hypothetical trading” on his website, unaccompanied by the proper disclaimers. As civil monetary penalty, the CFTC is seeking the higher of $140,000 or triple his monetary gain for each infraction after October 2008.

Read more about this CFTC enforcement action.

Original Article:

The Business Journal is reporting that the CFTC has filed a complaint against Neal Hall of Reidsville, North Carolina, and his website, The complaint alleges that he has been operating as a commodity trading advisor (CTA) though not registered as one, and that his website did not contain the necessary disclaimers.

According to the CFTC, Hall has advertised his S&P 500 trading program on his website since June 2010, and offered may of the same services as a CTA. However, he did so without registering as a CTA or complying with CFTC regulations. Furthermore, though his site extolled the virtuosity of his system based on its profit history and promises the “highest percentage accuracy rate of any existing S&P futures trading program on the internet – guaranteed”, he failed to provide the necessary disclaimers to caution investors that past performance does not guarantee or predict future success.

The CFTC is suing for restitution, disgorgement of ill-gotten gains, and civil monetary penalties. Hall plans to petition the court to dismiss the charges. He told the Business Journal that he never marketed himself as a CTA or managed his users accounts, so any breach of CFTC CTA regulation was unintentional. What he posted on his site represented only his opinions, he writes, and took sanctuary behind the First Amendment. Furthermore, Hall claims that no customer who used the system has lost money in the long run.

Meanwhile, it seems he has taken the charges to heart. A disclaimer of sorts appears on his site, though its efficacy should be called into question. It states that “we base our future projections upon historical analysis” even though “earlier analyses…is [sic] attained by using back tested data…This may also be considered to be hypothetical trading.” He does warn potential investors that “there are no guarantees of future income and there is the possibility of losing all or more of your investment when trading futures.” He also states that he is not a commodity trading advisor or in anyway related to NFA. However, without substantially altering his business model, he unlikely to escape CFTC or NFA jurisdiction.

The CFTC has not yet published the complaint or issued a press release on its website. The Commission, which has recently gone after industry giants engaged in price manipulation, fraud, and multi-million dollar Ponzi schemes, appears not to have lost its taste for small potatoes  (though the complaint may show the rouge CTA to be a fish more worth frying than the context suggests).

Creative Commons License photo credit: r-z

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