CFTC Participates in Joint Law Enforcement Initiative Aimed at Cleaning Up the Internet

CFTC PARTICIPATES IN JOINT LAW ENFORCEMENT INITIATIVE
AIMED AT CLEANING UP THE INTERNET

Washington -- The Commodity Futures Trading Commission (CFTC) announced today its participation in the TopTenDotCons Sweep, a joint law enforcement project sponsored by the Federal Trade Commission (FTC). The TopTenDotCons Sweep focuses on the "Top Ten" Internet related consumer frauds and includes civil and criminal actions brought by federal, state and foreign agencies.

The CFTC has pursued fraud when it is committed on Internet Web sites and elsewhere in connection with trading in commodity futures markets and providing commodity trading advice. Over the past year, through its Internet surveillance program, the CFTC has reviewed over 300 Internet Web sites looking for individuals and entities who are engaged in fraud in violation of the Commodity Exchange Act and CFTC regulations. In that time the CFTC has brought 17 separate enforcement actions against individuals and entities for violations in connection with the fraudulent promotion of commodity trading advisory systems and services on Internet Web sites. Among other things, these Web sites misrepresented profits that had been achieved or that one could expect to achieve by investing in commodity futures based on recommendations made by computerized systems or trading services.

"We are proud to be part of the TopTenDotCons Sweep and congratulate the FTC and other participants who have helped make this initiative so successful. This type of international, interagency cooperation sends a strong message that, although the Internet facilitates communication across borders, those borders will not protect those who use the Internet to dupe unsuspecting consumers. The CFTC is committed to protecting U.S. customers and markets from predatory sales practices and bogus claims about commodity investment opportunities wherever they occur."

In connection with bringing enforcement actions against fraudulent Web site operators, the CFTC issued a Consumer Advisory warning consumers to be cautious of trading advisory systems and services which promise easy profits with little or no risk. This Advisory, along with the CFTC's Consumer Advisories on "Foreign Currency Trading Fraud," "Sales Pitches Based on Seasonal Demand and Other Public Information" and "Promises of Easy Profits from Buying Precious Metals and Other Commodities" can be accessed through the CFTC's Web site at www.cftc.gov.

The CFTC has joined with federal, state, and international law enforcement agencies on several occasions over the past year in connection with law enforcement initiatives aimed at cleaning up fraud perpetrated by individuals over Internet Web sites. Initially, the CFTC identified fraudulent Web sites through participation in an interagency "Internet Surf Day" along with consumer protection agencies from 27 other countries. After that, the CFTC joined with the Securities and Exchange Commission and the FTC on May 1, 2000, to announce a coordinated crackdown on Internet Web sites that engage in investment related fraud.

This year the CFTC also participated in an International Internet Surf Day sponsored by the International Organisation of Securities Commissions (IOSCO), in which nearly 10,000 Web sites were reviewed and more than 1,000 were identified for follow-up review. The CFTC subsequently sponsored a two-day law enforcement training seminar for personnel from the member organizations of IOSCO who regulate the Internet.