FTC sends out $5.4 million checks to victims of Online Trading Academy
People who lost money to an investment training and education firm called ‘Online Trading Academy (OTA)’ will soon see refund checks of more than more than $5.4 million.
The US Federal Trade Commission today said the checks will be sent to 31,144 subscribers as a result of the settlement deal reached between the watchdog and OTA’s founder and CEO, Eyal Shachar.
Online Trading Academy also agreed to offer debt forgiveness to thousands of consumers who purchased its training programs. As part of the settlement, Shachar and other employees will pay between $5 and $9.1 million and turn over assets.
The FTC added that it expects the total penalties to reach more than $10 million. However, the original settlement included a monetary judgment of $362 million, which was partially suspended due to the defendants’ inability to pay.
The California-based entity, headed by former Israeli intelligence officer Eyal Shachar, organized training and interactive workshops on investing in the stock and forex markets.
In the opinion of the FTC, the odds organized by OTA offer useless knowledge for high fees, accusing it of fraudulently collecting millions of dollars from consumers over a six-year period.
Online Trading Academy was a provider of financial education, offering web-based courses under the guidance of over 120 instructors. The Irvine-based academy has come under fire after the FTC accused its operatives of misrepresenting many facts about their business.
More specifically, the retirement-age students were told that OTA instructors would teach them how to invest like the pros on Wall Street, regardless of their background and prior experience. Other claims included that they will be taught how to find “low-risk, high-potential investing opportunities” by applying a “patented strategy’ to any asset class, including stocks, options, futures, and currencies.
To lure consumers into paying up to $50,000 per class, OTA salespeople told their clients that signing up for OTA’s training and related services is likely to generate substantial income.
The FTC stated many other examples that show how the OTA academy used misleading advertising schemes. While OTA does not track the trading results of its customers, one of its promotional videos featured a retiree who purportedly earned “a retirement income that was bigger than his income while he was working,” including $40,000 in a single trade.
The watchdog further alleges that OTA’s earning claims made by its instructors were false or unsubstantiated.
The FTX added that in numerous instances, when dissatisfied customers requested refunds from OTA, they were forced to sign agreements barring them from posting negative reviews about its services. The form also prohibits purchasers who asked for their money back from notifying law enforcement agencies and forbids negative comments on any website or social media pages.