Exaggerated performance and false accreditation

In a complaint the SEC alleges that Sunset Investment Group, Inc, James Brown, Pinnacle Capital Advisors and Austin Tanner were responsible for publishing false and misleading performance claims and testimonials in press releases and on three websites – OptionInvestor,com, SplitTrader.com and NetBulls.com. The sites carry security and market analysis, an associated newsletter is also issued that covers stock analysis, trading strategies and trading recommendations. All parts of the business are managed by Sunset Investment Group under its president and only shareholder, Brown. He employed Tanner and his company, Pinnacle Capital, to build the homepages of the websites. The complaint says that OptionInvestor.com declared that users who adopted its trading approach and recommendations had made returns of between 60 and 240 per cent. The SEC contends that the figures were purely theoretical and that subscribers could not match the postulated returns. The SEC alleges that SplitTrader.com and NetBulls.com carried false and misleading endorsements of their performance. It claims that the comments were taken almost word-for-word from the Option Investor.com homepage and were unrelated to the record of either NetBulls.com or SplitTrader.com. Sunset Investment Group and Brown have neither denied nor admitted the allegations but they have agreed to an order against violating section 10(b) of Securities Exchange Act 1934 and Rule 10b-5 under the same Act. They will also pay a fine of US$70,000. The SEC has also sought permanent injunctions and civil financial penalties against Pinnacle Capital and Tanner. (SEC v Sunset Investment Group, Inc, James Brown, Pinnacle Capital Advisors and Austin Tanner.)