RagingBull stock-trading site accused of $137 million fraud - CBS News
The founders of a company called RagingBull tout themselves as expert stock traders who teach customers how they, too, can become millionaires. In marketing emails they say they've found a "hidden bull market" in the COVID-19 pandemic.
Federal regulators say the company operators have defrauded consumers out of more than $137 million over the past three years. And the coronavirus-fueled economic crisis hasn't tempered their "reckless" efforts to dupe vulnerable investors, government lawyers wrote in a court filing Monday.
The Federal Trade Commission sued RagingBull.com LLC and the company's co-founders, Jeffrey Bishop and Jason Bond, in Maryland. FTC attorneys are seeking federal court orders freezing company assets, halting the alleged fraud scheme and awarding relief to consumers, including refunds and restitution.
A purported disclaimer buried on the company's websites acknowledges that there is nothing to substantiate its claims that consumers are likely to make the "market-beating returns" that Raging Bull advertises, Monday's lawsuit says.
"To sustain this illegal operation, Defendants have poured millions of dollars each year into their deceptive marketing campaigns, filled with false earnings claims and targeting scores of new consumer victims," FTC attorneys wrote.
The FTC says RagingBull used celebrities, including former baseball star Jose Canseco and former stockbroker Jordan Belfort, to promote their services. Belfort was the inspiration for Martin Scorsese's 2013 movie "The Wolf of Wall Street." The FTC lawsuit doesn't accuse Canseco or Belfort of any wrongdoing.
Bishop and Bond formed RagingBull in 2014. The company sells online services related to stock and options trading and claims to have thousands of subscribers, according to the lawsuit.
Bilking retirees and immigrants
The FTC says bank records show the company is bilking consumers, many of whom are retirees or immigrants, out of millions of dollars each month. Many consumers have had their refund requests denied and had trouble canceling their online services, the FTC says.
Ads for Bishop's services call him a "genius trader who has made millions in the stock market." The company's website says Bond is a former gym teacher who taught himself to trade stocks and rid himself of $250,000 in debt.
The company's marketing materials don't tell consumers that Bishop and Bond primarily derive their incomes from RagingBull customers' subscription fees, not from stock and options trades. The suit says they have incurred "substantial and persistent losses" from their own stock and options trading activities.
In 2017, RagingBull emailed subscribers that Bond was invited to speak at Harvard Business School and posted video of the speech. But the FTC says the school never invited him. Instead, the agency says Bond paid a third-party promoter to stage the event at the Harvard Faculty Club using a fake Harvard insignia.
"Supposed" success of founders
"Raging Bull's image is built around the supposed trading success of its founders, Bishop and Bond. They go out of their way to falsely create larger-than-life personas as highly sought after trading geniuses who are living the high life off their trading prowess," FTC lawyers wrote.
Neither Bishop nor Bond immediately responded to an email or a phone message left with the company. The lawsuit says both men live in New Hampshire. RagingBull is based in Lee, New Hampshire, and has an office in Hunt Valley, Maryland, according to the suit.
Also on Monday, the New Hampshire state Bureau of Securities Regulation filed a separate cease-and-desist order against RagingBull.com LLC and its co-founders, claiming the company's subscription service is fraudulent.
Kyle Dennis, of Kingsport, Tennessee, also is named as a defendant in the FTC's suit, which describes him as a trading instructor for RagingBull. The Associated Press did not reach Dennis for comment.
The FTC says RagingBull and its instructors have repeatedly advertised claims that they could make consistent profits from the stock market during the COVID-19 pandemic. For example, marketing emails in April claimed Dennis "was able to rack up nearly $500K in profits by trading stocks related to the COVID-19 pandemic" and had found a "hidden bull market."
"Goldmine" opportunities amid pandemic
"Amid the current economic crisis, Defendants claim to have found a 'goldmine' and tout the 'success' of their COVID-19 and pandemic 'plays' in a market that Defendants claim is 'creating more money making opportunities than we've seen in over a decade,'" FTC lawyers wrote.
At least 220 consumers have filed complaints with the FTC, state attorney generals' office or the Better Business Bureau, according to the FTC.
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