By Craig Clough

Law360 (December 7, 2020, 8:02 PM EST ) The Federal Trade Commission filed a lawsuit in Maryland federal court Monday against subscription stock trade advice website Raging Bull, alleging while it purports to offer market tips from experts — including so-called COVID-19 "plays" — it actually uses deceptive marketing to defraud consumers of over $137 million.

Some of the individual co-defendants who operate Raging Bull are touted in the company's marketing as "experts" who are self-made millionaires but in reality are persistent market losers with the majority of their income derived from Raging Bull's subscription fees.

The FTC accuses Raging Bull and its operators of false or unsubstantiated earnings claims, misrepresentations regarding Raging Bull's services, and violations of the Restore Online Shoppers' Confidence Act.

"The majority of consumers do not beat the market or make the kinds of returns advertised," the FTC said. "Many consumers have lost substantial sums of money in the stock market following defendant's strategy or trade recommendations; some consumers have even lost tens of thousands of dollars on just a few trades. When consumers try to cancel their subscriptions, many find they cannot do so easily."

The defendants Raging Bull, companies affiliated with it and company leaders Jeffrey M. Bishop, Jason Bond and Kyle W. Dennis use aggressive online advertising and marketing based on their purported success at online trading and testimonials of consumers claiming to have made significant money using the company's products, the FTC said.

But there is little evidence to substantiate either the defendants' alleged success in market trading and the fine print of the company's terms of services, or disclaimers often contradict the claims made by the defendants' ads, the FTC said.

For example, one of the defendants' products, Bullseye Trades, is marketed with statements such as "I do all the homework and research during the week ahead, and you get to piggyback off my single best idea for the week," the FTC said.

But the FTC added, "In a complete about-face, the disclaimers say instead that consumers 'should never invest in the securities of any of the companies mentioned based solely on information contained on our website' and should assume 'all information provided regarding companies is not trustworthy unless verified by their own independent research.'"

The defendants also do not verify the testimonials and do not track if their customers make any money following their advice, the FTC said.

One online ad claimed Bond and Bishop's trading success led to them being "all over the media — including Times Square!" while another claimed Bond was invited to speak at Harvard Business School while featuring a video of him purportedly doing so, the FTC said.

In reality, the Times Square billboard was nothing more than a paid advertisement, and the defendants "paid for Bond to speak on or near Harvard's campus for promotional purposes; Bond was never invited by the school or any of its affiliates," the FTC said,

The agency added that Bond's "income is primarily derived from subscription fees consumers pay to Raging Bull and not from stock and options trading. Bond has incurred substantial and persistent losses as a result of his own stock and options trading activities."

The FTC is seeking among other things a permanent injunction to prevent future violations of the FTC Act and the Restore Online Shoppers' Confidence Act, possible restitution to consumers, and disgorgement of ill-gotten gains.

Raging Bull did not immediately respond to a request for comment. The FTC declined to comment. 

The FTC is represented in-house by Colleen Robbins, Sung W. Kim, Gordon Sommers and Thomas Biesty.

Counsel for the defendants could not immediately be determined.

The case is Federal Trade Commission v. RagingBull.com LLC et al., case number 1:20-cv-03538, in the U.S. District Court for the District of Maryland.

--Editing by Philip Shea.

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