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NFA Investor Newsletter

October 12, 2007

In this Issue: New Online Learning Program Warnings on "Free Lunch" Seminars Investor Education Conferences

NFA launches online learning program to help investors understand the opportunities and risks associated with futures trading

NFA has developed an online learning program for individuals who want to learn about the opportunities and risks inherent in exchange-traded futures. Individuals can access the program through the Investor Learning Center section of NFA's Web site (www.nfa.futures.org).

The program is based on NFA's publication "Opportunity and Risk: An Educational Guide to Trading Futures and Options on Futures." The interactive, self-directed program consists of four modules explaining how futures contracts are traded, who regulates the U.S. futures markets, the various ways individuals can participate in futures trading and steps individuals should take before opening a futures trading account. The program also contains a series of quizzes to help reinforce basic concepts and a complete glossary of terms related to futures trading.

NFA has also produced an online learning program related to off-exchange foreign currency (forex) trading. All of NFA's educational programs and publications can be found in the Investor Learning Center section of NFA's Web site.


Securities regulators issue warnings on "free lunch" investment seminars

During a Seniors Summit held on September 10 at the Securities and Exchange Commission (SEC), securities regulators released a joint report summarizing the results of their examinations of "free lunch" investment seminars. The year-long examination was conducted by the SEC, the Financial Industry Regulatory Authority (FINRA) and state securities regulators. The report's key findings include:

  • 100% of the "seminars" were instead sales presentations.
  • 59% reflected weak supervisory practices by firms.
  • 50% featured exaggerated or misleading advertising claims.
  • 23% involved possibly unsuitable recommendations.
  • 13% appeared to be fraudulent and have been referred to the most appropriate regulator for possible enforcement or disciplinary action.
The report also recommends that senior investors should understand that these "free lunch" seminars are sales seminars that result in the sales of financial products, and they may be sponsored by an undisclosed company with a financial interest in product sales. The examination report and other materials related to the SEC's Seniors Summit are available at:
www.sec.gov/spotlight/seniors/
sec2007seniorsmediakit.htm.

NFA to participate in two upcoming investor education conferences

NFA Communications and Education Director Larry Dyekman will give a presentation to investors at a conference sponsored by the American Association of Individual Investors (AAII). The conference is being held November 8-10 at the Hilton Walt Disney Resort in Orlando, Florida. Dyekman's presentation will focus on the language of the futures markets, the unique features of futures trading, the risk involved in futures trading and steps investors can take to avoid becoming a victim of fraudulent operations.

NFA will also sponsor an information booth in the exhibit hall, where staff will distribute education brochures and demonstrate how to conduct online background checks of futures firms and brokers.

For more information on the AAII conference, visit www.aaii.com/programs/conference/.

In addition, NFA will sponsor an information booth at the Traders Expo being held at the Mandalay Bay Convention Center in Las Vegas on November 14-18.

For more information on the expo, visit www.tradersexpo.com.


Recent Enforcement Actions

In the third quarter of 2007, NFA's Business Conduct Comittee issued Decisions, Member Responsibility Actions and Final Orders in Registration Cases against the following NFA Member firms and individuals. Click on the name for more detailed information.

Decisions in Disciplinary Cases
David J. Aguirre
Bacera Corporation
Barkley Financial Corporation
Ernie N. Blazeff
Cal Financial Corporation
Todd Crosland
Patrick J. Driscoll
Raymond A. Dubuque
Forefront Investments Corporation
Forex Capital Markets LLC
Forward Forex, Inc.
Elton Hsu
John A. Indelicato
Interbank FX LLC
Benjamin Kerpe
Brian P. King
Charles M. Montgomery
ODL Securities Inc.
Renaissance Asset Management
David J. Rodin
Trend Commodities Limited Partnership
United Global Markets LLC
US Financial Group, Inc.
Hugo C. Valdivia
Arthur Viera
Charles Warren
Marshall D. Wertheim
Anthony K. Wong
Todd A. Young

Member Responsibility Actions
Forward Forex, Inc.
Lake Shore Asset Management Ltd.
Laurence M. Rosenberg
Nations Investments LLC
Sentinel Management Group, Inc.

Final Orders in Registration Cases
Ivan G. Brown
Robert J. Del Rio
Daniel W. Pinkerton
Bernard M. Seeman


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