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CFTC Rule 4.41

Prohibits any use of advertising that acts as a device, scheme or artifice to defraud a participant or client, or uses a testimonial without proper accompanying disclosure.

Rule Overview

Jurisdiction: United States

Regulator: CFTC

Topic: Fraud

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The rule also prohibits the use of any simulated or hypothetical performance that is unaccompanied by a required statement:

“These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.”

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Further Reading

CFTC Letter 01-60 Go to https://www.cftc.gov/sites/default/files/tm/letters/01letters/tm01-60.htm Federal Register 72 FR 8106 Go to https://www.federalregister.gov/documents/2007/02/23/E7-3122/advertising-by-commodity-pool-operators-commodity-trading-advisors-and-the-principals-thereof R&W Technical Services v. CFTC Go to https://www.justice.gov/osg/media/233766/dl?inline Pierce, Rapid Fire Swing Trading, Chart Traders CFTC Complaint Go to https://www.cftc.gov/sites/default/files/files/enf/02orders/enfpierce-complaint.pdf NFA Guide to comms with the public Go to https://www.nfa.futures.org/members/member-resources/files/promo-material-guide.pdf