R.S. of Houston Workshop

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IN THE MATTER OF R.S. of HOUSTON WORKSHOP, ET AL.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3994; File No. 0023024 Complaint, January 12, 2001--Decision, January 12, 2001 This consent order addresses representations by Respondent R.S. of Houston Workshop, a company, and Respondents Ronald J. Schoemmell and Valdimar Thorkelsson, owners and principals of the company, concerning the earnings and profit potential, and the extent of risk involved, in using the respondents’ trading methods -- embodied in a training program they sell on the Internet -for the daily buying and selling of stocks (“day trading”). The order, among other things, requires the respondents to have a reasonable basis substantiating any representation that users of their day trading program can reasonably expect to earn large profits, or as much as $2,000 to $5,000 per day on some days; to earn profits of $500 to $750 or more per day; to approach trading as a business and earn a consistent living from the markets; and to trade in volatile markets with low risk. The order also prohibits the respondents from misrepresenting that users of any trading program can reasonably expect to trade with little or no financial risk, and from misrepresenting the extent of risk to which users of any such program are exposed. In addition, the order requires the respondents to disclose, clearly and conspicuously, that “DAYTRADING involves HIGH RISKS and YOU can LOSE a lot of money.,” in close proximity to any representation they make about the financial benefits of any trading program. Participants For the Commission: Peter Lamberton, Stephen Gurwitz, and Eileen Harrington.

For the Respondents: Robert J. Becerra, Raskin & Raskin, PA.

COMPLAINT The Federal Trade Commission, having reason to believe that R.S. of Houston Workshop, a company; Ronald J. Schoemmell, individually and as an owner and principal of the company; and Valdimar Thorkelsson, individually and as an owner and principal VOLUME 131 Complaint of the company ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent R.S. of Houston Workshop is an unincorporated entity, a d/b/a of Valdimar Thorkelsson, who filed a Certificate of Operation Under Assumed Name on November 17, 1997, in Harris County, TX (“company’’), with its principal office or place of business at 1419 Diamond Brook Drive, Houston, TX 77062. 2. Respondent Ronald J. Schoemmell is a fifty percent owner and principal of the company respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the company, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of R.S. of Houston Workshop. 3. Respondent Valdimar Thorkelsson is a fifty percent owner and principal of the company respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the company, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of R.S. of Houston Workshop. 4. Respondents have advertised, offered for sale, sold, and distributed trading programs, trading methods and training to the public. Respondents advise their clients to buy and sell stocks on a daily basis. Respondents sell their program, method and training through their Internet Web site, www.rsofhouston.com. 5. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act. 6. Respondents have disseminated or have caused to be disseminated Internet advertisements for their trading program or trading method and training, including but not necessarily limited VOLUME 131 Complaint to the attached Exhibit A, pages | through 4. These advertisements contain the following statements: “CAN TRADING REALLY BE MADE SIMPLE AND PROFITABLE? You Bet! Stop making trading more difficult than it should be. Let us show you how 4 incredibly simple techniques unlock the profit of the markets. So simple you will be amazed. You will say, “How did I never see this before, so simple yet so profitable?”

“This is your BEST chance of succeeding at trading. Let us show you what will last you a lifetime of profitable and enjoyable trading.”

“Our method loves the volatility and we will show you how to trade these markets with LOW RISK.”

“Trade a few hours in the evening or early AM and profit nicely.” ‘““A more reasonable expectation is to average between $500-$750 pr. contract/day and look to make $2,500-$3,500 pr. contract/week. Of course you will have days when you make $2,000, $3,000 or even $5,000 but you won’t be able to do that all the time. This is what the RS of Houston methodology is about, going for small consistent wins and hitting the occasional home run. This enables you to approach trading as a business and earn a consistent living from the markets.”

“The RS of Houston methodology for trading works especially well for daytrading the S&P 500 due to its high intraday volatility. The methodology is also quite effective on several other markets in a daily time frame.”

7. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that: VOLUME 131 Complaint a. That users of respondents’ trading program or trading method can reasonably expect to earn large profits, or as much as $2,000 to $5,000 per day on some days; b. That users of respondents’ trading program or trading method can reasonably expect to earn profits of $500 to $750 or more per day;

c. That users of respondents’ trading program or training method can reasonably expect to approach trading as a business and earn a consistent living from the markets; d. That users of respondents’ trading program or trading method can reasonably expect to trade in volatile markets with low risk;

e. Testimonials appearing in the advertisements for respondents’ trading program or trading method reflect the typical or ordinary experience of members of the public who use the program or method.

8. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 6, at the time the representations were made.

9. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 7, at the time the representations were made. Therefore, the representation set forth in Paragraph 8 was, and is, false or misleading.

10. Through the means described in Paragraph 6, respondents have represented, expressly or by implication that users of respondents’ trading program or trading method can reasonably expect to trade with little financial risk. VOLUME 131 Complaint 11. In truth and in fact, users of respondents’ trading program or trading method cannot reasonably expect to trade with little financial risk. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading.

12. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this twelfth day of January 2001, has issued this complaint against respondents. EXHIBIT A Daytrading, Futures and Stocks the RS of Houston Way http://www ssofhouston.com/ he - © RS OF HOUSTON WORKSHOP THE SIMPLE AND PROFITABLE WAY TO TRADE CAN TRADING REALLY BE MADE SIMPLE AND PROFITABLE? You Bet!! Stop making trading more difficult than it should be. Let us show you how 4 incredibly simple techniques unlock the profit of the markets. So simple you will be amazed. You will say, How5 1 7 1 3 8 1098 899 60 34 96.766006 did5 1 7 1 3 9 1177 901 14 32 96.934372 I5 1 7 1 3 10 1210 908 116 26 96.784195 never5 1 7 1 3 11 1340 907 70 27 96.614799 sees 1 7 1 3 12 1426 899 75 35 96.500992 this5 1 7 1 3 13 1520 899 144 43 96.279144 before,5 1 7 1 3 14 1682 909 46 26 96.331902 so5 1 7 1 3 15 1745 902 133 43 96.547600 simple5 1 7 1 3 16 1893 906 64 40 96.750458 yet5 1 7 1 3 17 1972 912 44 26 96.932777 so4 1 7 1 4 0 358 947 238 43 -1 5 1 7 1 4 1 358 947 238 43 88.168678 profitable?”2 1 8 0 0 0 354 1038 1663 145 -1 3 1 8 1 0 0 354 1038 1663 145 -1 4 1 8 1 1 0 354 1038 1656 56 -1 5 1 8 1 1 1 354 1047 85 34 95.484070 Just5 1 8 1 1 2 457 1047 177 41 96.149117 imagine,5 1 8 1 1 3 654 1047 58 34 96.149117 NO5 1 8 1 1 4 731 1048 119 33 96.576431 MORE5 1 8 1 1 5 869 1048 146 42 95.493896 lagging5 1 8 1 1 6 1035 1049 212 41 96.155739 indicators,5 1 8 1 1 7 1266 1038 191 52 96.711258 diverging5 1 8 1 1 8 1475 1049 224 43 96.732407 oscillators,5 1 8 1 1 9 1717 1051 136 42 96.491631 cycles,5 1 8 1 1 10 1871 1061 139 33 96.601044 waves,4 1 8 1 2 0 355 1096 1662 44 -1 5 1 8 1 2 1 355 1096 197 40 96.207603 channels,5 1 8 1 2 2 571 1097 121 40 96.619530 Gann,5 1 8 1 2 3 710 1096 164 43 93.300583 ellipses,5 1 8 1 2 4 895 1098 214 42 91.179512 pitchforks,5 1 8 1 2 5 1128 1098 190 42 96.224182 astrology5 1 8 1 2 6 1334 1101 74 31 95.709221 etc.5 1 8 1 2 7 1429 1099 200 34 93.292633 NOTHING5 1 8 1 2 8 1647 1115 15 7 93.221581 -5 1 8 1 2 9 1679 1101 107 34 96.851303 JUST5 1 8 1 2 10 1797 1103 82 33 96.193924 THES 1 8 1 2 11 1897 1104 120 33 96.193924 PRICE4 1 8 1 3 0 355 1146 343 37 -1 5 1 8 1 3 1 355 1147 146 32 95.876991 CHARTS 1 8 1 3 2 515 1146 145 33 92.344444 ITSELF5 1 8 1 3 3 677 1171 21 12 70.672180 ..2 1 9 0 0 0 352 1252 1673 100 -1 3 1 9 1 0 0 352 1252 1673 100 -1 4 1 9 1 1 0 352 1252 1673 49 -1 5 1 9 1 1 1 352 1252 125 36 85.692604 ‘These5 1 9 1 1 2 494 1252 224 42 95.987259 techniques5 1 9 1 1 3 736 1253 97 35 95.987259 have5 1 9 1 1 4 850 1254 148 34 96.730545 worked5 1 9 1 1 5 1016 1256 103 33 96.178993 since5 1 9 1 1 6 1135 1255 66 34 96.357285 thes 1 9 1 1 7 1219 1254 168 35 96.905655 markets5 1 9 1 1 8 1405 1254 97 35 96.354095 have5 1 9 1 1 9 1521 1254 99 36 96.131523 been5 1 9 1 1 10 1640 1257 33 33 95.978973 in5 1 9 1 1 11 1691 1258 206 34 95.978973 existence.5 1 9 1 1 12 1915 1258 110 43 96.245926 Why?4 1 9 1 2 0 356 1302 1614 50 -1 5 1 9 1 2 1 356 1304 170 32 96.477722 Because5 1 9 1 2 2 544 1303 27 33 96.199127 it5 1 9 1 2 3 588 1303 31 33 96.675385 is5 1 9 1 2 4 633 1302 66 34 96.729485 thes 1 9 1 2 5 717 1303 147 34 96.748947 markets 1 9 1 2 6 879 1305 144 33 95.953514 ITSELF5 1 9 1 2 7 1037 1304 125 42 58.005047 telling5 1 9 1 2 8 1180 1313 72 34 96.813179 you5 1 9 1 2 9 1270 1304 127 34 96.460968 where5 1 9 1 2 10 1415 1304 58 48 94.973045 it's5 1 9 1 2 11 1489 1306 114 41 96.449699 going5 1 9 1 2 12 1623 1305 61 43 96.582893 (or5 1 9 1 2 13 1698 1310 123 31 96.342178 wants5 1 9 1 2 14 1837 1310 39 32 95.557358 to5 1 9 1 2 15 1892 1308 78 42 95.941528 go).2 1 10 0 0 0 351 1400 1743 145 -1 3 1 10 1 0 0 351 1400 1743 145 -1 4 1 10 1 1 0 351 1400 1706 47 -1 5 1 10 1 1 1 351 1400 87 35 96.492401 This5 1 10 1 1 2 456 1402 31 33 96.750877 is5 1 10 1 1 3 502 1409 96 34 96.223022 yours 1 10 1 1 4 614 1402 108 33 96.054657 BEST5 1 10 1 1 5 735 1401 144 35 96.403351 chances 1 10 1 1 6 895 1402 42 35 95.860352 of5 1 10 1 1 7 948 1403 227 42 96.181061 succeeding5 1 10 1 1 8 1193 1406 41 31 96.430679 at5 1 10 1 1 9 1249 1403 161 42 96.426880 trading.5 1 10 1 1 10 1431 1404 62 34 96.826210 Lets 1 10 1 1 11 1510 1412 46 26 96.665413 us5 1 10 1 1 12 1572 1403 108 35 96.665413 shows 1 10 1 1 13 1695 1413 74 34 96.153534 you5 1 10 1 1 14 1787 1405 101 35 96.770370 what5 1 10 1 1 15 1901 1406 65 35 96.709450 will5 1 10 1 1 16 1985 1407 72 35 96.937614 last4 1 10 1 2 0 352 1450 1742 45 -1 5 1 10 1 2 1 352 1459 75 33 96.757835 you5 1 10 1 2 2 433 1446 19 54 95.227760 a5 1 10 1 2 3 487 1450 154 34 94.660225 lifetime5 1 10 1 2 4 656 1451 41 34 96.576576 of5 1 10 1 2 5 711 1451 196 42 96.167870 profitable5 1 10 1 2 6 922 1452 75 34 96.809059 ands 1 10 1 2 7 1015 1453 200 42 96.808189 enjoyable5 1 10 1 2 8 1231 1452 160 43 96.275536 trading.5 1 10 1 2 9 1411 1454 96 33 96.642723 90%5 1 10 1 2 10 1524 1453 43 34 96.937935 of5 1 10 1 2 11 1580 1454 149 35 96.710144 traders5 1 10 1 2 12 1746 1463 70 26 96.694931 uses 1 10 1 2 13 1832 1456 65 34 96.674606 thes 1 10 1 2 14 1912 1464 108 27 95.889290 same5 1 10 1 2 15 2035 1457 59 34 96.501205 old4 1 10 1 3 0 352 1500 1658 45 -1 5 1 10 1 3 1 352 1500 95 34 96.615509 tired5 1 10 1 3 2 467 1500 201 34 93.988770 indicators5 1 10 1 3 3 683 1500 75 35 95.276398 ands 1 10 1 3 4 777 1502 94 33 95.276398 90%5 1 10 1 3 5 888 1502 41 34 96.325256 of5 1 10 1 3 6 942 1502 147 34 96.146477 traders5 1 10 1 3 7 1107 1502 79 34 96.146477 loses 1 10 1 3 8 1204 1511 138 34 91.626404 moneys 1 10 1 3 9 1361 1503 25 33 91.626404 !!5 1 10 1 3 10 1407 1502 134 42 96.774994 Maybe5 1 10 1 3 11 1558 1503 110 35 96.687912 there5 1 10 1 3 12 1686 1505 30 33 95.199127 is5 1 10 1 3 13 1733 1512 21 26 95.199127 a5 1 10 1 3 14 1772 1505 238 35 96.130684 correlation?2 1 11 0 0 0 351 1607 1751 430 -1 3 1 11 1 0 0 351 1607 1751 231 -1 4 1 11 1 1 0 351 1607 1751 45 -1 5 1 11 1 1 1 351 1609 51 33 96.780014 To5 1 11 1 1 2 421 1607 110 42 96.076828 profits 1 11 1 1 3 548 1609 34 32 96.428116 in5 1 11 1 1 4 600 1608 65 34 96.203346 thes 1 11 1 1 5 683 1608 167 35 96.333313 markets5 1 11 1 1 6 865 1617 73 34 96.333313 you5 1 11 1 1 7 958 1610 96 34 95.584579 needs 1 11 1 1 8 1072 1612 40 32 96.362694 to5 1 11 1 1 9 1130 1610 47 34 95.757568 be5 1 11 1 1 10 1193 1610 111 42 96.176491 doing5 1 11 1 1 11 1322 1610 219 42 95.697075 something5 1 11 1 1 12 1559 1610 189 36 96.146950 different.5 1 11 1 1 13 1768 1613 72 34 96.287262 Gets 1 11 1 1 14 1856 1613 49 34 96.456474 rid5 1 11 1 1 15 1922 1613 41 34 96.964806 of5 1 11 1 1 16 1975 1613 44 34 96.577675 all5 1 11 1 1 17 2036 1614 66 34 96.315399 thea 1 11 1 2 0 353 1656 1627 46 -1 5 1 11 1 2 1 353 1656 258 41 91.543022 curve-fitted,5 1 11 1 2 2 629 1658 310 41 92.338829 over-optimized5 1 11 1 2 3 957 1658 168 42 96.470375 garbage5 1 11 1 2 4 1143 1659 236 41 96.496117 proliferated5 1 11 1 2 5 1399 1660 33 32 96.836586 in5 1 11 1 2 6 1449 1657 154 36 96.308029 currents 1 11 1 2 7 1618 1660 147 42 95.877327 trading5 1 11 1 2 8 1784 1661 196 34 96.646553 education4 1 11 1 3 0 355 1706 1718 47 -1 5 1 11 1 3 1 355 1714 198 34 96.754776 programs5 1 11 1 3 2 570 1706 74 33 95.475998 ands 1 11 1 3 3 663 1706 230 35 96.768410 mechanical5 1 11 1 3 4 910 1708 145 41 96.018707 trading5 1 11 1 3 5 1073 1708 189 34 95.788147 software.5 1 11 1 3 6 1280 1709 75 33 96.216843 You5 1 11 1 3 7 1376 1708 107 33 96.216843 knows 1 11 1 3 8 1499 1708 104 34 96.663864 what5 1 11 1 3 9 1618 1709 111 34 96.042572 we're5 1 11 1 3 10 1748 1710 173 43 96.369156 referring5 1 11 1 3 11 1937 1713 52 38 96.665726 to,5 1 11 1 3 12 2007 1712 66 33 96.610085 thea 1 11 1 4 0 353 1755 1702 46 -1 5 1 11 1 4 1 353 1755 97 34 96.716225 stuff5 1 11 1 4 2 463 1755 84 34 96.638161 that5 1 11 1 4 3 563 1755 87 42 96.165405 only5 1 11 1 4 4 665 1755 121 35 96.498024 works5 1 11 1 4 5 804 1757 33 33 95.759712 in5 1 11 1 4 6 857 1756 189 42 96.724915 hindsight5 1 11 1 4 7 1061 1757 75 34 96.714622 ands 1 11 1 4 8 1153 1757 91 34 96.150734 then5 1 11 1 4 9 1262 1757 82 34 96.150734 falls5 1 11 1 4 10 1361 1759 110 40 96.259933 apart5 1 11 1 4 11 1486 1757 111 35 96.998985 when5 1 11 1 4 12 1614 1767 96 33 96.609993 yours 1 11 1 4 13 1726 1767 137 34 95.946304 moneys 1 11 1 4 14 1881 1761 29 33 96.587395 is5 1 11 1 4 15 1925 1769 48 25 96.360168 on5 1 11 1 4 16 1989 1760 66 35 96.649437 thea 1 11 1 5 0 355 1804 84 34 -1 5 1 11 1 5 1 355 1804 84 34 92.925247 line.3 1 11 2 0 0 353 1905 1726 132 -1 4 1 11 2 1 0 353 1905 1726 38 -1 5 1 11 2 1 1 353 1905 102 32 96.950516 OURS 1 11 2 1 2 469 1905 256 33 96.095451 APPROACH5 1 11 2 1 3 743 1905 50 33 96.433006 IS5 1 11 2 1 4 809 1906 143 33 95.410011 WHAT5 1 11 2 1 5 965 1906 96 34 95.410011 YOU5 1 11 2 1 6 1081 1907 123 32 96.500397 HAVE5 1 11 2 1 7 1222 1907 118 32 96.748138 BEEN5 1 11 2 1 8 1358 1907 280 33 96.243286 SEARCHING5 1 11 2 1 9 1656 1908 106 33 96.184982 FOR.5 1 11 2 1 10 1781 1908 91 34 96.352020 IT'S5 1 11 2 1 11 1886 1909 84 33 93.712372 ALL5 1 11 2 1 12 1982 1909 97 34 93.712372 YOU4 1 11 2 2 0 355 1954 1437 40 -1 5 1 11 2 2 1 355 1955 138 39 96.278946 NEED,5 1 11 2 2 2 510 1954 272 34 95.681931 INCLUDING5 1 11 2 2 3 798 1955 246 34 95.697632 COMPLETES 1 11 2 2 4 1061 1956 147 34 96.039482 RULES5 1 11 2 2 5 1225 1957 94 32 95.455238 FOR5 1 11 2 2 6 1335 1957 169 32 96.565956 MONEYS 1 11 2 2 7 1513 1957 107 43 95.882889 ANDS 1 11 2 2 8 1635 1958 157 33 96.272346 TRADE4 1 11 2 3 0 354 2004 344 33 -1 5 1 11 2 3 1 354 2004 344 33 96.503647 MANAGEMENT.2 1 12 0 0 0 351 2103 1754 193 -1 3 1 12 1 0 0 351 2103 1754 193 -1 4 1 12 1 1 0 354 2103 1751 46 -1 5 1 12 1 1 1 354 2104 102 33 96.883255 Have5 1 12 1 1 2 473 2111 73 34 96.545700 you5 1 12 1 1 3 564 2104 82 41 96.958168 quit5 1 12 1 1 4 660 2111 42 26 96.822548 or5 1 12 1 1 5 716 2103 108 34 96.835243 shied5 1 12 1 1 6 842 2112 107 34 95.940392 away5 1 12 1 1 7 964 2104 95 35 95.729836 from5 1 12 1 1 8 1076 2105 146 42 96.475906 trading5 1 12 1 1 9 1240 2105 66 34 96.821823 thes 1 12 1 1 10 1322 2105 149 40 96.519989 volatile5 1 12 1 1 11 1490 2105 170 35 96.891380 markets5 1 12 1 1 12 1676 2112 58 29 95.922714 we5 1 12 1 1 13 1752 2106 96 35 96.864433 have5 1 12 1 1 14 1864 2115 92 26 96.474815 seen5 1 12 1 1 15 1975 2106 130 43 95.608284 lately?4 1 12 1 2 0 352 2149 1749 48 -1 5 1 12 1 2 1 352 2153 34 33 96.658867 If5 1 12 1 2 2 396 2149 76 46 96.640442 you5 1 12 1 2 3 493 2152 111 41 96.482803 have,5 1 12 1 2 4 622 2161 72 34 96.830292 you5 1 12 1 2 5 712 2161 66 26 96.460129 ares 1 12 1 2 6 796 2155 153 41 96.475624 missing5 1 12 1 2 7 968 2157 67 32 96.475624 outs 1 12 1 2 8 1050 2163 48 26 96.653709 on5 1 12 1 2 9 1116 2157 109 39 96.326027 great5 1 12 1 2 10 1240 2156 241 41 96.326027 opportunity5 1 12 1 2 11 1497 2155 60 34 96.906891 for5 1 12 1 2 12 1573 2156 143 41 95.622627 profits.5 1 12 1 2 13 1736 2157 76 34 95.953827 Ours 1 12 1 2 14 1828 2156 151 35 96.729050 methods 1 12 1 2 15 1998 2157 103 34 96.782936 loves4 1 12 1 3 0 351 2202 1743 50 -1 5 1 12 1 3 1 351 2202 67 35 97.001434 thes 1 12 1 3 2 435 2202 180 43 96.658623 volatility5 1 12 1 3 3 630 2202 73 35 96.902435 ands 1 12 1 3 4 721 2211 58 26 96.576309 we5 1 12 1 3 5 794 2203 66 34 95.785225 will5 1 12 1 3 6 877 2204 106 34 96.831017 shows 1 12 1 3 7 998 2213 73 33 96.282143 you5 1 12 1 3 8 1092 2205 88 37 94.075401 how5 1 12 1 3 9 1189 2207 40 45 94.075401 to5 1 12 1 3 10 1246 2204 107 35 95.274864 trades 1 12 1 3 11 1369 2205 114 34 96.354279 these5 1 12 1 3 12 1501 2205 170 35 96.578773 markets5 1 12 1 3 13 1687 2206 86 34 96.599213 with5 1 12 1 3 14 1793 2208 91 32 96.221466 LOWS 1 12 1 3 15 1901 2207 111 33 96.498474 RISK.5 1 12 1 3 16 2033 2208 61 33 96.563774 Let4 1 12 1 4 0 355 2252 596 44 -1 5 1 12 1 4 1 355 2253 101 33 96.553055 19995 1 12 1 4 2 476 2252 47 35 95.628159 be5 1 12 1 4 3 538 2261 97 34 95.628159 yours 1 12 1 4 4 650 2252 183 36 96.353722 breakout5 1 12 1 4 5 848 2262 103 34 96.345055 year.2 1 13 0 0 0 352 2353 1468 83 -1 3 1 13 1 0 0 352 2353 1468 83 -1 4 1 13 1 1 0 352 2353 1468 36 -1 5 1 13 1 1 1 352 2353 139 33 96.339409 GOODS 1 13 1 1 2 509 2353 151 33 96.230019 NEWS:5 1 13 1 1 3 677 2353 97 33 93.234276 YOU5 1 13 1 1 4 794 2353 156 34 91.158257 DONT HAVE TO GIVE UP YOUR DAY JOB TO DAYTRADE ! The markets are now open round the clock. If you have a full time job and always wanted to daytrade, but couldn't, NOW IS YOUR CHANCE. Trade a few hours in the evening or early AM and profit nicely. You pick the time to match your schedule. We will show you how.

HOME STUDY COURSE or ON-SITE TRAINING the choice is yours. COME LEARN AND WATCH US TRADE OUR MONEY FOR REAL!! NOW'S THE TIME TO GO FOR IT IN 1999.

R. S. of Houston Exhibit A, p. 1 of 4 .

1 of 2 9/17/99 10:55 AM Daytrading, Futures and Stocks the RS of Houston Way http///www.rsofhouston.com/ © Next - CLICK HERA FOR DWTAILG OR CAL Lec:

the HIPPEST Crowd in 800-221-4352 Love Buacs, Canmansra HILTow Lone Brace Borer Mr ding | Lonrn the dmlagiee and monte of Ocrosms 1-3, 1999 over D supentar trading wizarde! wi? E-mail us Copyright R.S. of Houston Workshop.

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Smart Web Tips www.smartwebtips.com ~ Join R. S. of Houston Exhibit A, p. 2 of 4 2 of 2 9/17/99 10:55 AM Introduction hy 1 of 2 http://www .rsofhouston.com/introduction.htm — RS OF HOUSTON WORKSHOP! THE SIMPLE AND PROFITABLE WAY TO TRADE Dear Trader, We appreciate your interest in the RS of-Houston Short-term and Daytrading Workshop. We are confident that you will benefit greatly from our workshop and it will improve your trading. We do not make outrageous unsubstantiated claims to appeal to your greed and give you false hopes, but do tell you what we believe is realistically possible. Furthermore, we pledge to work with you as long as it takes for you to master the methodology.

Anyone can trade a chart with 20/20 hindsight and make a ton of money on paper, but it's a whole different ball game when those price bars are coming at you from the hard-right edge of the’screen and the patterns are unfolding in real-time. In our workshop you will learn the RS of Houston methodology and observe RS and his trading partner trading the S&P500 futures live and be able to follow their thought process as they analyze the market. Win, lose or draw, the results are there for everyone to see. This is a course for traders, developed by traders who put their money where their mouth is and practice what they preach. . We don't pretend to only pick winners. There will be losing trades and losing days, but that is all part of trading. Our philosophy is that you can't expect to consistently make $1,000-$1,500 pr. day in the markets (at least not on a one-lot), contrary to what some vendors would have you believe. A more reasonable expectation Is to average between $500-$750 pr. contract/day and look to make $2,500-$3,500 pr. contract/week. Of course you will have days when you make $2,000, $3,000 or even $5,000 but you won't be able to do that all the time. This is what the RS of Houston methodology is about, going for small consistent wins and hitting the occasional home run. This enables you to approach trading as a business and earn a consistent living from the markets. The RS of Houston methodology for trading works especially well for daytrading the S&P 500 due to its high intraday volatility. The methodology is also quite effective on several other markets in a daily timeframe. This will all be explained in the workshop with suggestions for short-term traders who wish to trade the dailies Please take the time to examine our web site carefully, if after reviewing the material you feel that the RS of Houston Workshop might be something for you, contact us as soon as possible to reserve your space in one of the upcoming workshops. Space is limited and we expect them to fill up quickly. Sincerely, Valdi Thorkelsson.

(The CFTC requires that we state: THERE IS A RISK OF LOSS IN FUTURES | TRADING) o © Home Next R. S. of Houston Exhibit A, p. 3 of 4 9/17/99 11:03 AM Introduction http://www.rsofhouston.com/introduction.htm | | . a us Copyright R.S. of Houston Workshop.

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Smart Web Tips www.smartwebtips.com %s R. S. of Houston Exhibit A, p. 4 of 4 2 of 2 9/17/99 11:03 AM VOLUME 131 Decision and Order DECISION AND ORDER The Federal Trade Commission (“Commission’’), having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violations of the Federal Trade Commission Act; and Respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the aforesaid draft complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that respondents have violated the said Act, and that the complaint should issue stating its charges in that respect, and having thereupon accepted the aforementioned executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in § 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order: 1. Respondent R.S. of Houston Workshop is an unincorporated entity, a d/b/a of Valdimar Thorkelsson, who filed a Certificate of Operation Under Assumed Name on November 17, 1997, in Harris County, TX (“company”), with its principal office or place of business at 1419 Diamond Brook Drive, Houston, TX 77062. 2. Respondent Ronald J. Schoemmell is a fifty percent owner and principal of the company respondent. Individually or in concert with VOLUME 131 Decision and Order others, he formulates, directs, or controls the policies, acts, or practices of the company. His principal office or place of business is the same as that of R.S. of Houston Workshop. 3. Respondent Valdimar Thorkelsson is a fifty percent owner and principal of the company respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the company. His principal office or place of business is the same as that of R.S. of Houston Workshop. ORDER DEFINITIONS For purposes of this order, the following definitions shall apply: 1. "Clearly and conspicuously" shall mean as follows: A.

In an advertisement communicated through an electronic medium (such as television, video, radio, and interactive media such as the Internet and online services), the disclosure shall be presented simultaneously in both the audio and visual portions of the advertisement. Provided, however, that in any advertisement presented solely through visual or audio means, the disclosure may be made through the same means in which the ad is presented. The audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. The visual disclosure shall be of a size and shade, and shall appear on the screen for a duration, sufficient for an ordinary consumer to read and comprehend it.

In a print advertisement, promotional material, or instructional manual, the disclosure shall be in a type size and location sufficiently noticeable for an ordinary consumer to read and comprehend it, in VOLUME 131 Decision and Order print that contrasts with the background against which it appears.

C. On a product label, the disclosure shall be in a type size and location on the principal display panel sufficiently noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears. The disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or on any label. 2. In the case of advertisements disseminated by means of an interactive electronic medium such as the Internet or other online services, “in close proximity” shall mean on the same Web page and proximate to the triggering representation, and not on other portions of the Web site, accessed or displayed through hyperlinks or other means.

3. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

4. "Trading program" or “trading method” shall mean any program, method, service, course, instruction, system, training, manual, computer software, or other materials involving the purchase or sale of stocks, currencies, commodity futures, options, or other financial instruments or investments.

5. Unless otherwise specified, "respondents" shall mean R.S. of Houston Workshop, a company, its successors and assigns and its officers, owners and principals; Ronald J. Schoemmell, individually and as a fifty percent owner and principal of the company; and Valdimar Thorkelsson, individually and as a fifty percent owner and principal of the company; and each of the above's agents, representatives, and employees.

VOLUME 131 Decision and Order I.

IT IS ORDERED that respondents, directly or through any company, corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any trading program or trading method, in or affecting commerce, shall not represent, in any manner, expressly or by implication:

A. That users of respondents’ trading program or trading method can reasonably expect to earn large profits, or as much as $2,000 to $5,000 per day on some days; . That users of respondents’ trading program or trading method can reasonably expect to earn profits of $500 to $750 or more per day;

. That users of respondents’ trading program or trading method can reasonably expect to approach trading as a business and earn a consistent living from the markets; That users of respondents’ trading program or trading method can reasonably expect to trade in volatile markets with low risk;

. The amount of earnings, income, or profit that a prospective user could reasonably expect to attain; or . Any financial benefit or other benefit of any kind from the purchase or use of such trading program or trading method; unless respondents possess and rely upon a reasonable basis substantiating the representation at the time it is made. Il.

IT IS FURTHER ORDERED that respondents, directly or through any company, corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, VOLUME 131 Decision and Order offering for sale, sale, or distribution of any trading program or trading method, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, A. That users of the program or method can reasonably expect to trade with little or no financial risk; or B. The extent of risk to which users of the program or method are exposed.

Ill.

IT IS FURTHER ORDERED that respondents, directly or through any company, corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any trading program or trading method, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the financial benefits of such program, unless they disclose, clearly and conspicuously, and in close proximity to the representation, "DAYTRADING involves high risks and YOU can LOSE a lot of money."

Provided, the disclosure required by this Part is in addition to, and not in lieu of, any other disclosure that respondents may be required to make, including but not limited to any disclosure required by state or federal law orby a self-regulatory organization. The requirements of this Part are not intended to, and shall not be interpreted to, exempt respondents from making any other disclosure. IV.

IT IS FURTHER ORDERED that respondents, directly or through any company, corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any trading program or trading method, in or affecting commerce, shall not represent, in any manner, expressly or by implication, that the experience represented VOLUME 131 Decision and Order by any user, testimonial or endorsement of the trading program or trading method represents the typical or ordinary experience of members of the public who use the trading program or trading method unless:

A. Respondents possess and rely upon a reasonable basis substantiating the representation at the time it is made; or B. Respondents disclose, clearly and conspicuously, and in close proximity to the endorsement or testimonial, either: 1. what the generally expected results would be for users of the trading program or trading method, or 2. the limited applicability of the endorser's experience to what users may generally expect to achieve, that is, that users should not expect to experience similar results. For purposes of this Part, "endorsement" shall mean as defined in 16 C.F.R. § 255.0(b).

V.

IT IS FURTHER ORDERED that respondent R.S. of Houston Workshop, and its successors and assigns; respondent Ronald J. Schoemmell; and respondent Valdimar Thorkelsson shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All advertisements and promotional materials (including packaging) containing the representation; B. All materials that were relied upon in disseminating the representation; and C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon VOLUME 131 Decision and Order for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

Vi.

IT IS FURTHER ORDERED that respondent R.S. of Houston Workshop, and its successors and assigns; respondent Ronald J. Schoemmell; and respondent Valdimar Thorkelsson shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. Respondents shall maintain and upon request make available to the Commission for inspection and copying each such signed and dated statement for a period of five (5) years after creation.

VIL.

IT IS FURTHER ORDERED that respondent R.S. of Houston Workshop, and its successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the company that may affect compliance obligations arising under this order, including but not limited to a dissolution of a subsidiary, parent or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the company name or address. Provided, however, that, with respect to any proposed change in the company about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. VOLUME 131 Decision and Order VU.

IT IS FURTHER ORDERED that respondent Ronald J. Schoemmell, for a period of seven (7) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities.

IX.

IT IS FURTHER ORDERED that respondent Valdimar Thorkelsson, for a period of seven (7) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities.

X, IT IS FURTHER ORDERED that respondents R.S. of Houston Workshop, and its successors and assigns; respondent Ronald J. Schoemmell; and respondent Valdimar Thorkelsson shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. XI.

This order will terminate on January 12, 2021, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation VOLUME 131 Decision and Order of the order, whichever comes later; provided, however, that the filing of such a complaint will not effect the duration of: A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. XII.

All notices required to be sent to the Commission pursuant to this Order shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 601 Pennsylvania Avenue, N.W., Washington, D.C. 20580. ATTN: In the Matter of R.S. of Houston Workshop. By the Commission.

VOLUME 131 Analysis Analysis of Proposed Consent Order to Aid Public Comment Issued when the Commission tentatively approved a proposed consent order on October 6, 2001 The Federal Trade Commission has accepted, subject to final approval, an agreement containing a consent order from R.S. of Houston Workshop, a company, and Ronald J. Schoemmell and Valdimar Thorkelsson, fifty percent owners and principals of the company, individually and as officers of the company (together, “respondents’’).

The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement or make final the agreement’s proposed order.

Respondents sell a training program for a trading method on the Internet for the daily buying and selling of stocks (also known as “day trading”). They advertise on their Internet Web site, www.rsofhouston.com. This matter concerns allegedly deceptive representations of the earnings and profit potential, as well as the extent of risk involved in using respondents’ trading programs and trading methods.

The Commission’s proposed complaint alleges that respondents made unsubstantiated claims that users of respondents’ trading programs and trading methods could reasonably expect to earn large profits, as much as six figures annually (i.e., more than $182,000); that users of respondents’ trading programs and trading methods could reasonably expect consistent investment returns of $2,500 to $3,500 per week; that users of respondents’ trading programs and trading methods could reasonably expect to succeed at day trading for a lifetime of profitable and enjoyable trading; and that testimonials appearing in the advertisements for respondents’ trading programs and trading methods reflected the typical or ordinary experience of members of the public who use the program. In addition, the complaint alleges that respondents misrepresented that users of VOLUME 131 Analysis respondents’ trading programs and trading methods could trade in volatile markets with LOW RISK.

The proposed consent order contains provisions designed to prevent respondents from engaging in similar acts and practices in the future.

Part I of the proposed order requires respondents to have a reasonable basis substantiating any representation that users of respondents’ day trading program can reasonably expect to earn large profits: (1) that users of respondents’ trading program or trading method can reasonably expect to earn large profits, or as much as $2,000 to $5,000 per day on some days; (2) that users of respondents’ trading program or trading method can reasonably expect to earn profits of $500 to $750 or more per day; (3) that users of respondents’ trading program or trading method can reasonably expect to approach trading as a business and earn a consistent living from the markets; and (4) that users of respondents’ trading program or trading method can reasonably expect to trade in volatile markets with low risk. Part I also requires respondents to possess a reasonable basis substantiating claims about the amount of earnings, income, or profit that a prospective user of any trading program or trading method could reasonably expect to attain, or about any financial benefit or other benefit from the purchase or use of any such trading program or trading method.

Part II of the proposed order prohibits respondents from misrepresenting that users of any trading program can reasonably expect to trade with little or no financial risk and from misrepresenting the extent of risk to which users of any such program are exposed.

Part III of the proposed order requires respondents to disclose, clearly and conspicuously, “_DAYTRADING involves HIGH RISKS and YOU can LOSE a lot of money.” in close proximity to any representation they make about the financial benefits of any trading program. This disclosure is in addition to, and not instead VOLUME 131 Analysis of, any other disclosure that respondents may be required to make. Part IV of the proposed order prohibits respondents from representing without a reasonable basis that the experience represented by any user, testimonial or endorsement of any trading program represents the typical or ordinary experience of members of the public who use the program; or respondents must disclose either what the generally expected results would be for users of the trading program, or the limited applicability of the endorser’s experience to what users may generally expect to achieve, that is, that users should not expect to experience similar results. Parts V and VI of the proposed order require respondents to keep copies of relevant advertisements and materials substantiating claims made in the advertisements and to provide copies of the order to certain personnel. Part VII requires R.S. of Houston Workshop to notify the Commission of any changes in the corporate structure that might affect compliance with the order. Parts VIII and IX require that individual respondents Ronald J. Schoemmell and Valdimar Thorkelsson, respectively, to notify the Commission of changes in their employment status for a period of seven years. Part X requires respondents to file compliance reports with the Commission. Part XI provides that the order will terminate after twenty (20) years under certain circumstances.

The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.

VOLUME 131 Complaint