Release: 4724- 02
For Release: November 13, 2002

CFTC ISSUES CONSUMER ADVISORY WARNING THE PUBLIC ABOUT COMMODITY SCAMS ARISING OUT OF THE POSSIBILITY OF CONFLICT WITH IRAQ

WASHINGTON, D.C. – In the midst of the current international discussion about Iraq, the U.S. Commodity Futures Trading Commission (CFTC) has issued a Consumer Advisory warning the public to be wary of companies promising profits from heating oil and other commodity futures and options trading based on the possible effect of war with Iraq on the prices of these commodities. Such sales pitches are false. In reality, the prices of commodity futures and options contracts already take into account all known or predictable market conditions, such as changes in demand for a commodity or known shortages of a commodity or problems in production or delivery of that commodity due to major events in the world.

The CFTC issued this Advisory after receiving several reports of companies attempting to take advantage of the extensive media coverage of the Iraq situation. Consumers are advised to watch for the warning signs listed below, and to take precautions before placing their funds with any company that offers leveraged or financed commodity transactions:

Avoid any Company that Predicts or Guarantees Large Profits Because of Well-Known Current Events, Published Reports or Predictable, Seasonal Changes in Demand

• Stay Away from Companies that Promise Little or No Financial Risk
• Carefully Scrutinize Unsolicited Phone Calls and e-mails about Investments, Especially Those from Out-of-State Salespersons or Companies with Which You Are Unfamiliar
• Be Wary of High-Pressure Efforts to Convince You to Send or Transfer Cash Immediately to the Firm via Overnight Shipping Companies, the Internet, by Mail, or Otherwise
• If You Are Suspicious, Contact the CFTC, the National Futures Association, Your State Attorney General's Office of Consumer Protection, or the Better Business Bureau Prior to Trading
• Be Sure You Get Written Documentation about the Product, the Company, and Its Track Record, in order to Verify the Data. If You Can, Before Doing Business with any Company, Check the Company's Materials with Someone Whose Financial Advice You Trust
• If in Doubt, Do Not Give Money to Anyone. If You Can't Get Solid Information about the Company and the Investment, You May Not Want to Risk Your Money

To see a copy of the Consumer Advisory, go to the following Internet web address: http://www.cftc.gov/. Note to editors: The CFTC has also published six other Consumer Alerts, which can be found at http://www.cftc.gov/cftc/cftccustomer.htm - advisory.

Media Contact:
Daniel Nathan
Chief, CFTC Office of Cooperative Enforcement
CFTC Division of Enforcement
(202) 418-5314

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