Release 4537-01 (CFTC Docket No. 01-03)
For Release July 2, 2001

CFTC SETTLES CASE AGAINST KENTUCKY MAN FOR FRAUDULENTLY SELLING COMMODITY TRADING SYSTEM

Federal Regulator finds that Donald M. Fishback, Jr. Represented to Investors that his Company’s Trading System Could “Virtually Eliminate Losing Trades”

WASHINGTON -- The United States Commodity Futures Trading Commission (CFTC) announced today the acceptance of an offer of settlement from The Donald M. Fishback Company, Inc., and its president and sole owner, Donald M. Fishback, Jr., both of Lexington, Kentucky, in connection with a complaint filed by the CFTC on November 16, 2000 (see CFTC News Release 4474-00, November 16, 2000).

The order that accompanies the settlement finds that from at least February 1996 through July 1999, Fishback and his company fraudulently solicited members of the public to purchase products and services for trading options on commodity futures. Fishback sold a trading system called Options and Derivative Decision Support (ODDS). The products and services offered with the system included weekly fax “hotlines” and a monthly “journal” that provided options trading recommendations to subscribers.

The order also finds that Fishback and his company falsely claimed in their solicitation materials that options trading with the ODDS system resulted in substantial profits and little or no risk. For instance, according to the order, respondents falsely claimed “ODDS has conquered the markets and amassed fortunes” due to the fact that it was “100% accurate for six months.” Contrary to that claim, the order notes that a number of his customers that relied on ODDS recommendations suffered trading losses. Furthermore, the order notes that although Fishback and his company misleadingly implied that the purported profits were based on actual trading, in reality, they were solely derived from simulated trading.

The order concludes that Fishback and his company falsely represented that Fishback had extensive trading experience. They claimed that “Fishback is considered one of the world’s most successful options traders” and that “[he] can attribute all of his market success” to his ODDS system. In fact, as set forth in the order, Fishback never engaged in large-scale commodity options trading, and at no time did he trade commodity futures or options pursuant to the ODDS system.

The CFTC order finds that by their fraudulent conduct, Fishback and his corporation, The Donald M. Fishback Company, violated the Commodity Exchange Act (CEA) and CFTC regulations, and:

• requires them to pay a $75,000 civil monetary penalty within 10 days of the entry of the order;
• directs them to cease and desist from further violation of the CEA, as set forth above; and
• requires them to comply with certain undertakings, including undertakings that prohibit making misrepresentations regarding the profits and risks associated with trading futures or options, and requires them to withdraw all registrations with the Commission and the agreement that they will not seek registration with the Commission for a period of five years.

The Fishback Company and Fishback consented to the entry of the order without admitting or denying the findings of the order or the allegations of the complaint.

A copy of the CFTC order may be found at http://www.cftc.gov.

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Case Contact:

Scott Williamson
Acting Regional Counsel
Central Regional Office
Division of Enforcement
(312) 886-3090

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[email protected]
Public Affairs Facsimile: 202-418-5525
Attention: Dennis Holden