An online provider of stock tips for day traders was accused by California’s attorney general of capitalizing on the Covid-19 lockdown by illegally selling investment advice without a license.
Beverly Hills-based AwesomeCalls Inc. sells memberships for a daily “live chat” service where purported stock-trading gurus recommend securities, California Attorney General Xavier Becerra said in a statement Thursday. The state sued the company earlier this month.
“The COVID-19 lockdown has moved more people online and into day trading, opening the stock market to millions of new entrants,” Becerra said. “You wouldn’t take legal advice from a fake lawyer, or medical advice from a fake doctor. AwesomeCalls is improperly giving investment and stock trade advice while masquerading as a neutral educational forum.”
A.J. Haworth, who runs AwesomeCalls, denied Becerra’s allegations, saying he makes it clear in disclosures on the website that he’s not a financial adviser and never trades for anyone but himself.
“You can consider me a mentor, a coach, or whatever,” Haworth said in a phone interview. “All it is is my opinion. I understand stocks.”
The company offers a one-day pass to its service for $25, or a monthly pass for $197. It claims on its website to have more than six professional moderators “focused on helping YOU achieve your trading goals daily!”
Haworth said his website is a community of 700 traders who watch what he does. He also has almost 44,000 followers on Twitter.
In the lawsuit, filed Feb. 4 in Los Angeles state court, the attorney general is seeking to stop AwesomeCalls from offering illegal investment advice and pay a penalty of at least $1 million for each violation of the corporations code that bars such conduct.
Haworth said he’ll ask for the lawsuit to be moved to federal court.
If the attorney general were successful, he’d be able to shut down all sorts of forums, including Discord and other chat rooms.
“You couldn’t even tweet on Twitter,” Haworth said.
The case is: The People of the State of California v. AwesomeCalls Inc., 21-st-cv-4430. Superior Court, State of California (Los Angeles).
This article was provided by Bloomberg News.