Day trading is just one avenue to achieve financial independence. It is another example of chasing the American dream. Warrior Trading, a company that allures hopeful traders to buy its method for making money in the day trading arena, has been holding out the bait for the same type of people who chase this dream. Buying and selling stocks seems like an easy way to make good money. Warrior Trading has made millions of dollars by advertising a technique that fits that description to potential clients.
Despite the opportunities offered by Warrior Trading, the Federal Trade Commission (FTC), filed a civil case against them in the U.S. District Court for the Western District of Massachusetts. The result was that Warrior Trading had to pay $3 million dollars to consumers for misleading claims and spurious money-making opportunities made by the company.
Warrior Trading was also ordered to cease making its false claims, which according to the FTC, the company, along with its CEO, has been using to persuade individual consumers to pay hundreds, sometimes thousands, of dollars for a system of day trading that in the end did not work for the majority of the company’s clients. The FTC also claimed that on top of losing their investment in the program, most of its clients lost money and some of them lost thousands.
The Director of the FTC’s Bureau of Consumer Protection commented that the court’s decision had forced Warrior Trading to pay a price for misleading consumers.
What Is Day Trading?
Day trading is trading but with a twist. Investors do all their buying and selling all in one trading day. The point is to have all positions closed before the market is closed for the trading day. This way, supposedly, an investor can avoid any unimagined or insurmountable risk of the stock from one day to the next.
Day trading differs from long-term trading, which fundamentally promotes buy-and-hold and value investing strategies. Day trading is the ultimate get-in-get-out method of trading.
Day trading is considered untraditional. Trading stocks has its ethics and laws, most of which the FTC oversees and protects, so stretching the boundaries of trading can bring serious consequences.
How Has Warrior Trading Made Money?
Reaching potential clients is not a complicated undertaking for businesses dealing with money-making ideas or schemes. Warrior Trading used sale outlets from telemarketing to social media, such as Facebook and YouTube. The company essentially promotes day-trading investment opportunities online. It sells its sure-fire strategy to consumers looking for an edge.
The company’s strategy is for day trading online using the software. Like so many get-rich-quick schemes, it sells the concept that there is money to be made in the market if you know how to do it, and Warrior Trading claimed to know. From 2018 to 2021, the company made its money by selling online programs, live chats, e-books, and more to get consumers to pay out dollars.
How Did Warrior Trading Respond?
Warrior Trading is still in business. It responded, therefore, like how any company conducting business would react; carefully. The company’s quick response was first to dismiss any allegations against the CEO’s claims about their earnings. The company was adamant that their success as a broker is legit, claiming that their broker statements are accessible publicly and available on their website. Furthermore, the company claims their broker statements have continued to be verified despite continuous audits.
The company came to terms with trading itself being a risky business, stating that the industry is better served if the consumer is educated on the potential risks of trading. The company then acknowledged the FTC by accepting their guidance to better inform their clients of trading risks.
Protections for Consumers
Both state and federal laws protect consumers, and they contain numerous statutes and regulations to create a marketplace for consumers that is safe and transparent. Consumer protection law is regulated by the FTC’s Bureau of Consumer Protection on a federal level. The FTC is an independent federal agency that oversees consumer protection laws.
Therefore, it is essential to understand that you have rights as a consumer. You are granted an equitable balance that prevents sellers from using misleading or dishonest business methods. Scams and misleading claims are prohibited. Consumers are also protected from unsafe products, identity theft, unfair debt collection practices, etc.
When Should I Hire a Lawyer?
It is difficult to know when and under what circumstance your protected rights as a consumer have been broken. Having been misled by a money-making scheme that has lost you money, for instance, grants you the right to have legal representation. A lawyer can educate you on any consumer laws applicable to your situation and guide you toward choosing a path that will bring you the best results.
Misleading money-making schemes are often tricky, especially without a lawyer. Many companies operate between the lines. It is difficult to know, for instance, the difference between a scam and an opportunity that did not work out, or between a misleading claim and an idea that has solid potential.
Companies that deal with false perceptions often sell their scheme with minimal penalties, creating small changes that allow them to continue operations and make money. Some consumers might not even be aware that a company has undergone penalties or restrictions related to their situation.
Pittsburgh Consumer Fraud Lawyers at East End Trial Group Represent Consumers Whose Rights Have Been Violated
If you are a victim of a money-making scheme or bad business practice, an experienced lawyer can make a difference. Speak with one of our skilled Pittsburgh consumer fraud lawyers at East End Trial Group to understand your rights and the best course of action. Call us at 412-223-5740 or contact us online for a free consultation. Located in Pittsburgh, we serve clients throughout Pennsylvania.