April 22, 2022

FTC Fines Warrior Trading for Misleading Day-Trading Customers

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

The FTC reached a settlement with online day-trading companies Warrior Trading, Inc. and Warrior Operating, Inc., and the company’s owner and operator (collectively “Warrior”) to resolve allegations that Warrior misled customers concerning the profitability, risk, and earnings potential of Warrior’s day-trading strategies and related goods and services, including courses, workshops, programs, and tools.
The FTC’s complaint alleged that, from January 2018 to March 2021, Warrior’s online marketing materials misrepresented the results day traders who utilized Warrior’s tools and systems could expect, and, in so doing, violated Section 5(a) of the FTC Act and the Telemarketing Sales Rule. The FTC alleged that Warrior’s online disclaimer was difficult to find and ineffective, that Warrior failed to clearly describe the risk of losses in day trading, and that it made misleading and deceptive claims regarding potential earnings from day trading.
Under the terms of the Stipulated Order, Warrior must pay $3 million, which the FTC will then allocate to consumer relief. Warrior is also prohibited from making future unsubstantiated earnings claims for consumers who trade using Warrior’s strategies, and from misrepresenting to consumers the capital, time, and skillset required to become a successful trader. The Stipulated Order also bars Warrior from further violations of the Telemarketing Sales Rule, including making any misrepresentations through telemarketing about investment opportunities or, among other things, the risk, liquidity, earnings potential, or profitability consumers can expect from using Warrior’s products and services.

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