ASA Adjudication on Knowledge to Action Ltd

Ad

An e-mail, with the subject heading "Complimentary Tickets to Secret Millionaire Trader Event". Headline text in the body copy of the e-mail stated "Millionaire Traders Secrets Seminar 7 CRITICAL Trading Secrets for Instant Stock Market Success. Learn the Secrets of Millionaire Stock Traders ... for FREE!". Bullet-pointed text underneath stated "At this unique seminar you will learn simple strategies to: Create an immediate monthly income from trading only 30 minutes a day; Make over £700 per day in a falling stock market; Identify exactly which high profit breakout stocks to trade now; Master an easy way to manage your trades for maximum profit potential; Understand the 'Secret' Risk Management Formula keeping risk to only 1%; Automate powerful trading strategies which require only minutes per day; Know precisely where, when and how to enter and also how to exit trades for maximum income".

The e-mail included four testimonials from people who had previously attended the course. They stated "I came on the Trader's University Course in Jan 09. It is now a few months on and last week I made 15% profit. I aim to make that per month", "I did the course at the end of April 2008. I'm approximately 80% up on my account (as of Oct 2008). My objective is to give up my full time job within the next 12 months and begin trading full time", "I have been trading with Knowledge to Action for a year. It has totally changed my life. It has allowed me to follow my passion which is song writing and I now have the time and the money to do something I actually want to do. At the moment I'm on 10% growth on my account every month. This is such a thorough course; it's given me so much confidence" and "I did the course December last year (2007). My best result the following month was paying off the cost of the course in one day. I am currently making £4000 a month".

Small print at the bottom of the ad stated "Please note: Our Seminars are purely educational in nature, we do not advise or tip and any trades shown in any seminar are for educational illustration purposes only. Past performance is no guarantee of future performance and you may not get back the amount you invest. The value of investments and the income from them may go down as well as up and are not guaranteed. CFDs and Spread Bets are highly leveraged products and carry a high level of risk to your capital. Due to the leverage offered it is possible for you to incur losses in excess of your initial margin. These products are not suitable for all investors so please make sure that you understand the risks involved. Rates of exchange may cause the value of investments to go up or down".

Issue

The complainant, who had attended the seminar, challenged whether:

1. the ad misleadingly exaggerated the skills you would learn from the free seminar, as she believed for any training and strategic advice attendees would have to book onto a course, with prices varying from £2999 (+VAT) to £4999 (+VAT);

2. the ad misleadingly implied that attendees could "Make over £700 per day in a falling stock market"; and

3. the testimonials were genuine.

CAP Code (Edition 11)

Response

1. Knowledge to Action Ltd (Knowledge to Action) submitted a copy of the materials provided to delegates at the Millionaire Traders Secrets seminar, as well as a copy of the 2009 Millionaire Trading Secrets report given to delegates free of charge. They explained that the seminar was designed to be a fast and effective introduction to the world of trading, and provided attendees with the basic tools required to commence trading. Knowledge to Action said the ad did not claim that the seminar was comprehensive, and explained that they offered a more rigorous programme for attendees wanting to develop their skills further.

2. Knowledge to Action explained that they showed attendees power play short strategies which, in their trading results, had served to generate over 100% return within the year. They pointed to two specific trades from July 2008 in the documentation provided, which they said served as examples of trades opened and closed within a 24-hour period resulting in gains of £603.78 and £756.81. Knowledge to Action said they did not guarantee a £700 daily return, but presented that figure as an example of what could be achieved even in a falling market.

3. Knowledge to Action said they had received positive feedback from delegates attending both the free seminar and the Traders University Programme. They said the four testimonials in the ad were genuine and up-to-date, and they provided video footage of the testimonials being given by the former delegates named in the ad, as well as copies of signed and dated consent forms from those delegates.

Assessment

1. Upheld

The ASA considered that the claims "Learn the Secrets of Millionaire Stock Traders ... for FREE" and "Learn direct from professional full time traders, who will show you in step by step detail how they make immediate and consistent income trading the stock markets", alongside the list of strategies customers would learn at the seminar, implied that the seminar would be detailed and enable customers to begin trading successfully after attending the event. We noted that, whilst the materials provided for delegates at the seminar did cover some basic features of the trading programme, the information provided was brief and of an introductory nature. We also noted that the seminar presented those features of the programme in the context of how they would be developed for attendees during the Traders University paid course. We noted that the ad did not make clear that the free seminar was an introduction only, or that consumers would have to attend a further, paid course to get full access to the strategies and skills behind the trading programme. We considered that the ad exaggerated the skills attendees would learn from the Millionaire Traders Secrets Seminar, and we therefore concluded that it was misleading.

2. Upheld

We noted that the two trades referred to in the seminar presentation were used as examples of what could be achieved in a falling market. We considered, however, that consumers were likely to understand the claim "Make over £700 per day in a falling stock market" to mean that they would be able to make at least £700 on a daily basis. We considered that we had not seen evidence that demonstrated that previous attendees on the course had made at least £700 from the two trades referred to in the seminar presentation, or made that amount of money on a daily basis since completing the course. We therefore concluded that the claim was misleading.

On points (1) and (2) the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 and 7.2 (Truthfulness).

3. Not upheld

We noted from the video footage provided that the testimonials given by the former delegates corresponded with the statements featured in the ad. We also noted that those delegates had given permission for the video footage, and statements made by them in the videos, to be used by Knowledge to Action. We therefore concluded that the testimonials were genuine.

On this point we investigated the ad under CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 14.1 (Testimonials and evidence) but did not find it in breach.

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)