The Securities and Exchange Commission today filed civil fraud charges against two people who bilked millions of dollars from investors-particularly seniors-by hawking a get-rich-quick stock trading system on television and at investor workshops.
The SEC's complaint alleges that Utah residents Linda Woolf and David Gengler duped seniors and others who had attended free introductory seminars into believing they would make extraordinary stock market profits if they bought "Teach Me to Trade" (TMTT) classes, mentoring, and computer software. The workshop presentations took place between 2003 and 2006.
According to the complaint, Woolf and Gengler made false and misleading statements to sell TMTT packages that were priced from $11,000 to $40,000. They both 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.
The two made outlandish claims about their trading success using the system. They also false claims that people using TMTT had a 96.5% success rate, and they promised similar results to anyone who bought the TMTT package. In one infomercial, Gengler said, "If you can simply follow steps and follow our principles, you'll make money. It's that simple."
The SEC alleges that Woolf and Gengler are actually unsuccessful traders who never bought TMTT's products. Woolf never declared a trading profit on her federal tax returns; Gengler often declared losses, or no profits. But they struck it rich with their TMTT scheme-Woolf earned roughly $4 million in commissions and Gengler made about $2.25 million from selling TMTT packages, according to the complaint.
TMTT is a unit of Whitney Information Network, Inc., a publicly-traded company based in Cape Coral, Fla., that conducts nationwide investor workshops that purport to teach investors the secrets to making money in the stock market.
"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 SEC's complaint against Woolf and Gengler seeks to get back their ill-gotten gains, civil money penalties and permanent injunctions enjoining the defendants from violating the antifraud provisions of the federal securities laws.