In-Person Demonstrations of the System

34. During the in-person demonstration, Roeder, Cybulski or Stewart would use a laptop computer to display both real time trading results and historical trades based on the System. The historical trades purported to show what the trading results for the System would have been had the CTS strategy been used given certain historical parameters. The real time trades purportedly were trades that a trainer had made within the previous few days. The prospective student would view the results of the purported real time trade. Prospective students were not told that these purported real time trades were, in reality, hypothetical trades.

The System's Trading Record

35. In all the various forms of CTS' solicitations, including the recorded message, the Internet, and promotional material, the Respondents made claims that trading pursuant to the System enabled CTS to amass substantial gains each day in their capital account. However, the solicitations failed to mention that the claims of an "80 point gain" (recorded message) and the 5-10% gain per day (Internet and promotional materials) were based on hypothetical trading and not actual trading results. In addition, these representations are misleading because the Respondents knew from their own trading that the System did not perform as advertised in actual trading.

Oral Misrepresentations by Respondents Concerning Purported Actual Trading Pursuant to the System

36. Respondents told prospective students that John Sieberg had tested and then traded pursuant to the System for a long time, variously represented as anywhere between eight and twenty years. However, Sieberg did not develop the System until 1995-1996, and never traded pursuant to the System until 1996.

37. Roeder claimed to the other Respondents, and Respondents represented to prospective students, that Roeder had been trading pursuant to the System for eight years. In fact, Roeder had been trading pursuant to the System for approximately one year at the time Respondents made this misrepresentation.

38. By at least January 1998, the Respondents knew that Roeder had been trading pursuant to the System for approximately one year rather than the eight years Respondents had previously represented to prospective students and that Sieberg also had been trading pursuant to the System for approximately one year rather then the eight to twenty years Respondents had previously represented to prospective students. Nevertheless, Respondents continued to disseminate false information to prospective students concerning the trading history of both Sieberg and Roeder.

Concerning Roeder's Background and Trading Record

39. Roeder misrepresented her prior employment history to prospective students. She claimed that she had been an executive with Chicago Title Company ("Chicago Title"), and that she had left that position, despite the fact that she was making a six-figure salary, because she had become so profitable trading foreign currency futures pursuant to the System. She further represented that she was able to trade for half a day and make as much money in a year as she had at Chicago Title in a year.

40. In fact, Roeder is a convicted felon who was fired by Chicago Title when it learned that Roeder had stolen more than $63,000 by falsifying expense account statements. In May 1997, Chicago Title obtained a judgment against Roeder for more than $250,000 in actual losses and punitive damages.

41. Roeder repeatedly claimed during her solicitations of prospective students and while teaching, or appearing at, CTS seminars, that she had made large profits trading pursuant to the CTS System. Roeder also represented that she was an advanced trader and consistently traded ten to twenty contracts per trade. In fact, Roeder never made large profits trading pursuant to the System and rarely traded the level of contracts that she claimed to be trading.

In the spring of 1998, Roeder gave an in-person demonstration to two students to show them how the System worked in real market conditions. During that demonstration, Roeder used her computer purportedly to make and then liquidate a trade that purportedly resulted in profits in excess of $10,000. The demonstration appeared to show the specific trades she placed and the specific times that she bought and sold her contracts. In fact, Roeder never made any such trade and never made a profit in excess of $10,000 at any time on any trade. During the 22 months that Roeder had a commodity futures trading account, she lost $40,792.68 trading foreign currency futures contracts.

Concerning Cybulski's Background and Trading Record

42. Cybulski acted as a reference for Roeder in connection with her solicitation of prospective students. When such prospective students called Cybulski, he represented to them that he was a successful and profitable trader.

43. During Cybulski's solicitations of prospective students, he represented that he was a "successful" trader who (1) was able to give up his construction business because of his profitable trading pursuant to the System; (2) bought a car for his mother from the profits from his first two months of trading; and (3) was able to buy a $450,000 house in Lake Tahoe, Nevada as a result of trading pursuant to the CTS System.

44. In fact, Cybulski lost $4,704.25 during his first two months of trading, and lost more than $14,330.89 during his 20 months of sporadic and limited trading. He never made enough money trading to buy either a car or a house or to give up his construction business. Cybulski's construction license was revoked in 1991.

Concerning Stewart's Trading Record

45. During his solicitations of prospective students, Stewart represented that he was doing well trading and was making "real money" trading. Stewart used a laptop computer and his purported trading account "statements" during his in-person demonstrations to show prospective students the results of his purportedly real trades. Stewart never told the prospective students that the trading results were not his own actual trading results.

46. In fact, Stewart lost approximately $10,500 during his one year of trading pursuant to the System, and he made money in only one of the months during which he traded.

IV.

VIOLATIONS OF THE COMMODITY EXCHANGE ACT

AND REGULATIONS THEREUNDER

COUNT I

VIOLATIONS OF SECTION 4b(a)(i) and (iii) OF THE ACT:

COMMODITY FUTURES FRAUD

47. The allegations contained in paragraphs 1 through 47 above are realleged and incorporated by reference.

48. From February 1997 through July 1998, Respondents CTS and Roeder, from May 1997 to June 1998, Respondent Cybulski, and from November 1997 to June 1988, Respondent Stewart violated Sections 4b(a)(i) and (iii) of the Act, 7 U.S.C. �� 6b(a)(i) and (iii) (1994), in that they willfully cheated, defrauded or deceived, or attempted to cheat, defraud or deceive other persons by, among other things, making material misrepresentations and omissions of fact, including but not limited to the misrepresentations and omissions set forth in paragraphs 9 to 47, above.

49. Roeder directly or indirectly controlled CTS, and did not act in good faith or knowingly induced, directly or indirectly, the violations described above, and, pursuant to Section 13(b) of the Act, 7 U.S.C. 12c(b) (1994), is liable for CTS' violations of Sections 4b(a)(i) and (iii) of the Act.

50. Pursuant to Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. � 4 (1994), and Regulation Section 1.2, 17 C.F.R. �1.2 (1999), CTS is liable for any violations of Sections 4b(a)(i) and (iii) of the Act by its officers, directors, managers, employees and agents, including Roeder, Cybulski and Stewart, in that all such violations were within the scope of each person's office or employment with CTS.

COUNT II

VIOLATIONS OF SECTION 4o(1) OF THE ACT

AND COMMISSION REGULATION SECTION 4.41(a):

FRAUD BY A CTA

51. The allegations contained in paragraphs 1 through 51 above are realleged and incorporated herein by reference.

52. From February 1997 through July 1998, Respondents CTS and Roeder, from May 1997 to June 1998, Respondent Cybulski, and from November 1997 to June 1988, Respondent Stewart, while acting as CTAs, violated Section 4o(1) of the Act, 7 U.S.C. � 6o(1) (1994), and Section 4.41(a) of the Commission's Regulations, 17 C.F.R. � 4.41(a) (1999), in that the Respondents directly or indirectly employed a device, scheme or artifice to defraud clients or prospective clients, or engaged in transactions, practices or a course of business which operated as a fraud or deceit upon clients or prospective clients, including, but not limited to, the activities set forth in paragraphs 9 to 47, above.

53. Roeder directly or indirectly controlled CTS, and did not act in good faith or knowingly induced, directly or indirectly, the violations described above and, pursuant to Section 13(b) of the Act, is liable for CTS' violations of Section 4o(1) of the Act and Regulation Section 4.41(a).

54. Pursuant to Section 2(a)(1)(A)(iii) of the Act and Regulation Section 1.2, CTS is liable for any violations of Section 4o(1) of the Act and Regulation Section 4.41(a) by its officers, directors, managers, employees and agents, including Roeder, Cybulski and Stewart, in that all such violations were within the scope of each person's office or employment with CTS.

COUNT III

VIOLATIONS OF COMMISSION REGULATION 4.41(b):

FAILURE TO DISPLAY CAUTIONARY STATEMENT REGARDING

LIMITATIONS OF HYPOTHETICAL TRADING RESULTS

55. The allegations contained in paragraphs 1 through 55 above are realleged and incorporated herein by reference.

56. Pursuant to Section 4.41(b) of the Commission's Regulations, 17 C.F.R. � 4.41(b) (1999), a CTA must not present the performance of any simulated or hypothetical commodity interest account, transaction in a commodity interest account, or series of transactions in a commodity interest of a CTA unless such performance is accompanied by the required cautionary warning concerning the limitations of hypothetical trading, as set forth in Section 4.41(b).

57. From February 1997 through July 1998, Respondent CTS, while acting as a CTA, violated Regulation Section 4.41(b) in that it included hypothetical trading results in its promotional materials and on its Internet website, but did not include in the promotional material and on the website the required cautionary warning concerning the limitations of hypothetical trading results.

58. Roeder directly or indirectly controlled CTS, and did not act in good faith or knowingly induced, directly or indirectly, the violations described above, and, pursuant to Section 13(b) of the Act, is liable for the violations of Regulation Section 4.41(b).

59. Pursuant to Section 2(a)(1)(A)(iii) of the Act and Regulation Section 1.2, CTS is liable for any violations of Section 4.41(b) by its officers, directors, managers, employees and agents, including Roeder, Cybulski and Stewart, in that all such violations were within the scope of each person's office or employment with CTS.

COUNT IV

VIOLATIONS OF SECTION 4m(1) OF THE ACT, 7 U.S.C. � 6m(1) (1994):

ACTING AS AN UNREGISTERED COMMODITY TRADING ADVISOR

60. The allegations of paragraphs 1 through 60 are realleged and incorporated herein by reference.

61. From February 1997 through July 1998, Roeder violated Section 4m(1) of the Act, 7 U.S.C. � 6m(1) (1994), in that she, without being registered as a CTA, managed four customer accounts, as set forth in paragraph 19, above. During this time, Roeder made use of the mails or other instrumentalities of interstate commerce in connection with her business as a CTA.

COUNT V

VIOLATIONS OF SECTIONS 4.31(a) AND (b) OF THE

REGULATIONS, 17 C.F.R. �� 4.31(a) AND (b) (1999):

CTA REGULATORY VIOLATIONS

62. The allegations contained in paragraphs 1 through 62 are realleged and incorporated by reference.

63. From February 1997 through July 1998, Roeder violated Regulations Sections 4.31(a) and (b), 17 C.F.R. �� 4.31(a) and (b) (1999), by 1) soliciting and entering into agreements to manage at least four client accounts without first delivering the mandatory Disclosure Document to these prospective clients prior to managing such accounts, and 2) without receiving back from these prospective clients an acknowledgement that these prospective client received the Disclosure Document.

V.

By reason of the foregoing allegations, the Commission deems it necessary and appropriate, pursuant to its responsibilities under the Act, to institute public adminis-trative proceedings to determine whether the allegations set forth in Section III above are true and, if so, whether an appropriate order should be entered in accordance with Sections 6(c) and 6(d) of the Act, 7 U.S.C. �� 9 and 13b(1994).

Section 6(c) allows the Commission to enter an order (1) prohibiting a Respondent from trading on or subject to the rules of any contract market and requiring all contract markets to refuse such person all trading privileges thereon for such period as may be specified in the Commission's Order, (2) if the Respondent is registered with the Commission in any capacity, suspending, for a period not to exceed six months, or revoking the registration of that Respondent, (3) assessing against the Respondent a civil penalty of not more than the higher of $110,000 or triple the monetary gain to the Respondent for each violation of the Act or Regulations committed after November 27, 1996, and (4) requiring restitution to customers of damages proximately caused by the violations of the Respondent.

Section 6(d) allows the Commission to enter an Order directing that the Respondent cease and desist from violating the provisions of the Act and Regulations found to have been violated.

VI.

WHEREFORE, IT IS HEREBY ORDERED that a public hearing for the purpose of taking evidence and hearing arguments on the allegations set forth in Section III above be held before an Administrative Law Judge, in accordance with the Rules of Practice under the Act, 17 C.F.R. � 10.1 et seq. (1999), at a time and place to be fixed as provided in Section 10.61 of the Rules of Practice, 17 C.F.R. � 10.61 (1999), and that all post-hearing procedures shall be conducted pursuant to Sections 10.81 through 10.1-07 of the Rules of Practice, 17 C.F.R. �� 10.81 through 10.107 (1999).

IT IS FURTHER ORDERED that each Respondent shall file an Answer to the allega-tions against said Respondent in the Complaint within twenty (20) days after service, pursu-ant to Section 10.23 of the Rules of Practice, 17 C.F.R. � 10.23 (1999), and pursuant to Section 10.12(a) of the Rules of Practice, 17 C.F.R. � 10.12(a) (1999), shall serve two copies of such Answer and of any document filed in this proceeding upon Karen Kenmotsu or Richard Glaser, Trial Attorneys, Commodity Futures Trading Commission, Division of Enforcement, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, or upon such other counsel as designated by the Division. If any Respondent fails to file the required Answer or fails to appear at a hearing after being duly served, such Respondent shall be deemed in default, and the proceeding may be determined against such Respondent upon consideration of the Complaint, the allegations of which shall be deemed to be true.

IT IS FURTHER ORDERED that this Complaint and Notice of Hearing shall be served on each Respondent personally or by certified or registered mail forthwith pursuant to Section 10.22 of the Commission's Rules, 17 C.F.R. � 10.22 (1999).

In the absence of an appropriate waiver, no officer or employee of the Commission engaged in the performance of the investigative or prosecutorial functions in this or any factual-ly related proceeding will be permitted to participate or advise in the decision upon this matter except as witness or counsel in proceedings held pursuant to notice.

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