Indigo Investment Systems, Inc.,E T al

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IN THE MATTER OF INDIGO INVESTMENT SYSTEMS, INC., ET AL. CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-4003; File No. 0023015 Complaint, March 7, 2001--Decision, March 7, 2001 This consent order addresses an advertising campaign designed to sell Indigo, a stock trading program, conducted by Respondent Indigo Investment Systems, Inc. -- and Respondent Frank Alfonso, its chief executive officer -- through ads in various media, including investment magazines, Internet banner ads, and three websites. The order, among other things, requires the respondents -- with regard to the sale of any trading program -- to possess a reasonable basis for future representations about the amount of earnings, income, or profit, or the rate of return, that a user of such trading program could reasonably expect to attain; the usual or typical earnings, income, profit, or rate of return, achieved by users of such trading program or any part thereof; or any financial benefit or other benefit of any kind from the purchase or use of such trading program. The order also prohibits respondents, in connection with the sale of any trading program, from misrepresenting that hypothetical or simulated earnings data represent actual trading results; that users of such trading program can reasonably expect to trade with little risk; or the extent of risk to which users of the trading program are exposed. In addition, the order requires future benefits claims to be accompanied by the statement that the type of trading promoted involves high risks, and that traders can lose a significant amount of money. Participants For the Commission: Janet M. Evans, C. Lee Peeler, and Russell Porter.

For the Respondents: Glenn Mitchell, Stein, Mitchell & Mezines.

COMPLAINT The Federal Trade Commission, having reason to believe that Indigo Investment Systems, Inc., a corporation, and Frank Alfonso, individually and as an officer of the corporation ("respondents"), have violated the provisions of the Federal Trade VOLUME 131 Complaint Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent Indigo Investment Systems, Inc. (“IISI’) is a Florida corporation with its principal office or place of business at 8302 S. Tamiami Trail, Sarasota, Florida 34238. IISI was formerly known as MicroStar Research and Trading, Inc. 2. Respondent Frank Alfonso is an officer of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporation, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of IISI.

3. Respondents have advertised, offered for sale, sold, and distributed investment trading programs and training to the public. Investment trading programs sold by respondents include the “Indigo” program for trading stocks. The Indigo program issues, on a daily basis, signals advising its users to buy, sell, or hold specific stocks. These signals are based upon data generated by software programs that look at historical data to determine what trading patterns would, in the past, have been profitable. Respondents have advertised Indigo on their Web sites, www.iicrostar-research.com, www.msindigo.com, and www.indigoinvestor.com, as well as through Internet banners and newspaper advertisements.

4. 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. 5. Respondents have disseminated or have caused to be disseminated advertisements for their investment trading programs and training, including but not necessarily limited to the attached Exhibits A through H. These advertisements contain the following statements:

A.

9/22/99 Year OK OK VOLUME 131 Complaint “INDIGO CAPTURES HUGE PROFITS INVESTING IN HOT STOCKS!!! Indigo's MSX1_MO05 - Stock Model Performance Annual Annual Ror Ror MSX Market 52.43% -8.22% 107.22% 27.84% 42.86% 4.42% 27.06% 7.16% 67.24% -1.36% 27.51% 35.30% 85.83% 19.33% 147.41% 31.76% 141.59% 26.14% 24.58% 8.98% Total Annual #of Buy/Hold trades -30.86% 285 63.15% 215 50.90% 175 12.61% 160 9.80% 145 48.00% 110 36.85% 165 16.34% 265 745% 275 -51.99% 225 Maximum Risk 10.35% 16.16% 10.62% 20.95% 2.89% 5.58% 6.78% 6.79% 15.74% 10.38% PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS (Amounts listed assume an initial investment size of $10,000) [Consumer endorser:] ‘I have been actually investing and making money with the Indigo program. I recently made a trade with the msx405.por, making $4,000 in one trade.’ Mr. Suprenant, NY”

Exhibit A (Web page, www.microstar-research. com/home/index2.htm) B.

VOLUME 131 Complaint “Indigo Stock Test Here are some of Indigo’s recent positions: Recent MSX Trades ENTRY EXIT ENTRY CURRENT DATE DATE SYMBOL POSITION PRICE PRICE PROFIT 8/26/1999 08/30/99* AMZN SHORT 128.562 119.250 $687 8/26/1999 08/30/99* AOL SHORT 100.438 93.250 $682 8/27/1999 08/30/99* BBY SHORT 72.500 70.313 $270 8/26/1999 08/30/99* CMGI SHORT 87.313 81.813 $597 8/27/1999 08/30/99* EBAY SHORT 127.250 119.438 $579 8/27/1999 08/30/99* EXDS SHORT 82.750 76.125 $765 8/26/1999 08/30/99* LU SHORT 66.375 64.313 $279 8/26/1999 08/30/99* MSPG SHORT 31.563 28.939 $800 8/26/1999 08/30/99* YHOO SHORT 152.688 143.812 $547 *CLOSED POSITIONS $10,000 INITIAL PURCHASE EACH OF 9 STOCKS (AMZN, AOL, BBY, CMGI, EBAY, EXDS, LU, MSPG, YHOO) 1999 ANNUALIZED — PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS Enter your stock symbol below to learn how Indigo will maximize your profits and reduce your risk!” Exhibit B (Web page, www.microstarresearch.com/home/stocktest/msxquote.shtml) . “Click, Click, You’re Rich? It costs more than chump change, but Indigo - Blue Chip Investment Strategies, the investment management software program (actual cost: $2,720) developed by Sarasota’s MicroStar Research & Trading, Inc., has done “phenomenally well” since it was introduced in 1995, says sales manager Greg Roper. “With this program, you don’t shoot yourself in the foot by second-guessing,” he says. “It’s not emotional; it’s not greedy.” Click on its signal update, and Indigo instructs on which securities to buy and/or sell at what prices. “Those instructions are based on the internal research and analysis that the program does every day,” Roper says. “It gives the individual investor the same edge in terms of technical research VOLUME 131 Complaint and trading pattern analysis that the big brokers and large institutional traders have,” Roper says. OK OK MicroStar’s clients have seen their conservative portfolios jump “40 percent annually over the past three years, while most aggressive portfolios with hot internet stocks have gone up several hundred percent,” Roper says.” Exhibit C (Web page, www.microstarresearch.com/home/reviews/maddux.htm) ‘Real People... Real Results !!! Indigo... A powerful easy to use computer trading program designed for individual investors. Fully researched and ready-to-trade, the program provides you with 100% objective signals that consistently beat the market! KEK *K Listen to what some of our customers have to say. OK KK [Consumer endorser:] “I began trading with about $30,000. I have made approximately $210,000 using the program in the past 5 months. Since 1/19/1999, I have made a 200% profit in program by buying a stock earlier or later than the program would signal - this is almost always a bad decision. If you can just follow what the program tells you to do, you will make money.”

D. Heacock, VA OK OK OK VOLUME 131 Complaint Indigo will quickly update your stock and mutual fund data, automatically analyze the markets with scientifically tested investment methods, and get you into winning stocks and mutual funds. . .all in less than 10 minutes a day! [Consumer endorser:] “I made $2,100 with Indigo in the last 5 weeks. The technical support is excellent. Easy portfolio management. Research and testing is easy and complete. The staff is helpful and friendly, especially for beginners to Indigo.” C. Brennman, FL”

Exhibit D (Web page, www.microstarresearch.com/home/testimony/testimony.htm) E. “INDIGO ONLINE (Which is representative of Indigo Investment Software) 1S NOW UP 193% ANNUALIZED IN 1999 11! THAT IS BEATING THE S&P 500 INDEX Exhibit E (Web page, www.microstarresearch.com/cgi-local/marketrpt.pl) F. “$10,000 to over $10,000,000 with...

Indigo’s RSX Model Imagine earning over 10 million dollars in profits since 1990 on only a $10,000 original investment. That’s what Indigo’s 10-Stock Relative Strength Model RSX could have produced for you... an average annual return of over 115% per year! * OF CK HIGH ANNUAL RETURNS LOW RISK”

VOLUME 131 Complaint Exhibit F (newspaper ad, Investor’s Business Daily) G. “If you were using INDIGO’s RSX - TECH 5 PORTFOLIO you could now have $539,329 IN PROFITS!!! * OK Ok Ok Indigo Investment Software Imagine your $10,000 account growing to over $539,329! That’s what Indigo produced since 1994 trading 3 High Tech Industry stocks .. .”

Exhibit G (newspaper ad, Investor’s Business Daily) H. “Stock Performance Test Put Us To The Test! This stock performance test will show you the past results trading with Indigo Investment Software. Please enter the stock of your choice ....

Here are a few dynamic performances from Indigo for 1999: 77.19% trading AOL (America Online) 71.99% trading BGEN (Biogen) 62.48% trading HD (Home Depot)”

[Stock test entry form follows, requiring entry of stock symbol, name, country, telphone number and e-mail address. Upon entering the stock symbol “LU,” completing the form and pushing the submit button, the consumer receives the following automated response: ] VOLUME 131 Complaint “Stock Performance Test Results for Lucent Technology - LU The results shown below are based upon an initial investment size of $10,000. The trading period is indicated by the dates below in the blue bar. The net profit includes interest and compounded equity.

Performance Summary April 01, 1996 - December 31, 1999 Total Net Profit: $82, 235 Total Trades: 19 % Winning Trades: 78.95% Annual % Return: 80.83% Maximum Risk: 7.68% Yearly Performance Year Indigo Market Number Percentage Maximum Annual Annual of Trades of Wins Risk % Return % Return 1996 62.72% 13.27% 4 100.00% .00% 1997 59.60% 31.01% 3 66.67% 5.64% 1998 =. 202.75% 25.57% 5 80.00% 4.27% 1999 17.16% 19.37% 7 71.43% 6.66% To find out how you can start making PROFITS like this. . . . CALL INDIGO INVESTMENT SYSTEMS NOW!!! * OK Ok Ok Performance results listed above and in all marketing materials represent simulated computer results over past historical data, and not the results of an actual account. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the VOLUME 131 Complaint impact, if any, of certain market factors, such as lack of liquidity. Simulated 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 those shown. Testimonial or actual account results presented to not necessarily reflect the results of all users of the program. Past performance does not guarantee future results. Trading some indigo models represents a high risk speculative investment. Please read customer . . y disclosure document before purchasing. Exhibit H (Web pages, www.msindigo.com/ index.cfm?fuseAction=showStockTestForm, and www.msindigo.com/index.cfm?fuseAction= requestStockTest) 6. Through the means described in Paragraph 5, respondents have represented, expressly or by implication, that: a. The Indigo earnings data described in the ads represent trades that were actually made and that resulted in the profits stated in the advertisements;

b. — The annual returns for the years 1990 through 1999, as enumerated in the advertisements, were actually achieved by users of respondents’ Indigo trading program; and c. Users of respondents’ Indigo investment trading program can reasonably expect to trade with little financial risk.

7. In truth and in fact:

a. The Indigo earnings data described on the site do not represent trades that were actually made and that resulted in the profits stated in the advertisements. The data represent results of hypothetical trading and are VOLUME 131 Complaint prepared with the benefit of hindsight using historical data.

The annual returns for the years 1990 through 1999, as enumerated in the advertisements, were not actually achieved by users of respondents’ Indigo trading program. The annual returns are based upon hypothetical trades using historical data. Indeed, respondents’ Indigo trading program did not exist until 1995.

Users of respondents’ Indigo trading program cannot reasonably expect to trade with little financial risk. Consumers who trade in stocks risk a substantial loss of capital, and trading some Indigo models represents a high risk speculative investment.

Therefore, the representations set forth in Paragraph 6 were, and are, false or misleading.

8.

Through the means described in Paragraph 5, respondents have represented, expressly or by implication, that: Most users of respondents’ Indigo trading program who have invested in conservative portfolios have achieved an annual return of 40% over the past three years. Most users of respondents’ Indigo trading program who have invested in aggressive portfolios with hot Internet stocks have achieved returns of several hundred percent.

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

VOLUME 131 Complaint d. Users of respondents’ Indigo trading program can reasonably expect to achieve substantial profits on a consistent basis, whether pursuing a conservative or aggressive trading strategy.

9. Through the means described in Paragraph 5, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 8, at the time the representations were made.

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

11. 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 seventh day of March, 2001, has issued this complaint against respondents.

Indigo Online Sdred notes eek 8302 S Tamiami Trail Ser aseta, Fi 34238 ome] —_——— We'll change the way you invest forever! Important Message to all ° 4 1 45 1 6 0 533 796 905 44 -1 5 1 45 1 6 1 533 822 186 18 57.846485 DOWNLOADS5 1 45 1 6 2 1124 796 64 32 96.119919 Indigo5 1 45 1 6 3 1243 801 195 28 0.000000 customers’!4 1 45 1 7 0 517 860 1037 38 -1 5 1 45 1 7 1 517 877 58 17 73.979790 OURS 1 45 1 7 2 590 877 140 18 93.897942 COMPANY5 1 45 1 7 3 1006 856 146 53 92.263138 E-Trades 1 45 1 7 4 1169 856 169 53 96.776573 Investors5 1 45 1 7 5 1354 860 88 38 96.978630 Clicks 1 45 1 7 6 1455 861 99 31 96.817619 Here!4 1 45 1 8 0 968 925 633 41 -1 5 1 45 1 8 1 968 925 113 32 96.384109 Notices 1 45 1 8 2 1093 925 188 41 96.124001 Regarding5 1 45 1 8 3 1293 925 41 32 96.124001 245 1 45 1 8 4 1346 925 95 33 96.365150 Hours 1 45 1 8 5 1452 925 149 41 96.122993 Trading4 1 45 1 9 0 916 985 726 36 -1 5 1 45 1 9 1 916 985 151 35 95.773315 INDIGO5 1 45 1 9 2 1079 985 231 36 95.773315 CAPTURES5 1 45 1 9 3 1322 986 124 35 96.608047 HUGE5 1 45 1 9 4 1457 986 185 35 96.291603 PROFITS4 1 45 1 10 0 971 1033 615 36 -1 5 1 45 1 10 1 971 1033 228 36 96.195671 INVESTING5 1 45 1 10 2 1210 1035 44 33 96.008881 IN5 1 45 1 10 3 1265 1035 91 33 89.043930 HOT5 1 45 1 10 4 1367 1035 219 34 76.629471 STOCKSI!!4 1 45 1 11 0 862 1075 764 56 -1 5 1 45 1 11 1 862 1075 10 56 54.014351 |5 1 45 1 11 2 880 1075 90 56 43.197006 9227005 1 45 1 11 3 1055 1089 40 20 68.968719 Indigo’s5 1 45 1 11 4 1153 1088 154 22 33.937119 MSX1_MOS5 1 45 1 11 5 1298 1075 12 45 91.000916 -5 1 45 1 11 6 1321 1075 60 45 96.138832 Stocks 1 45 1 11 7 1396 1075 68 45 72.302002 Models 1 45 1 11 8 1471 1088 155 23 89.889107 Performence4 1 45 1 12 0 992 1128 1075 48 -1 5 1 45 1 12 1 992 1131 99 21 40.594864 Annual5 1 45 1 12 2 1102 1127 13 37 92.911400 |5 1 45 1 12 3 1122 1131 100 21 65.523651 Annual5 1 45 1 12 4 1424 1128 76 36 95.371498 Totals 1 45 1 12 5 2027 1157 40 19 63.063110 ne4 1 45 1 13 0 1013 1154 1085 62 -1 5 1 45 1 13 1 1013 1170 58 20 79.579330 ron5 1 45 1 13 2 1101 1153 20 48 94.350571 |5 1 45 1 13 3 1143 1170 58 21 50.743290 non5 1 45 1 13 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1821 1192 24 22 36.720779 a5 1 45 1 14 14 1856 1188 65 55 13.318748 ede5 1 45 1 14 15 1943 1188 74 55 38.622471 eli5 1 45 1 14 16 2057 1189 42 50 37.209694 ne4 1 45 1 15 0 1022 1244 1076 43 -1 5 1 45 1 15 1 1022 1248 44 22 92.629066 $2.45 1 45 1 15 2 1152 1244 30 34 59.988838 38.5 1 45 1 15 3 1307 1250 39 20 0.000000 30.5 1 45 1 15 4 1479 1245 26 34 93.493721 28:5 1 45 1 15 5 1620 1250 56 21 82.229752 10.355 1 45 1 15 6 1789 1244 148 43 77.618835 max405.por,5 1 45 1 15 7 2012 1250 86 26 74.303520 mating4 1 45 1 16 0 933 1279 1095 28 -1 5 1 45 1 16 1 933 1284 118 22 49.392349 991107.5 1 45 1 16 2 1150 1285 31 21 91.929039 27.5 1 45 1 16 3 1315 1286 60 20 80.311264 63.155 1 45 1 16 4 1479 1287 23 20 94.319504 215 1 45 1 16 5 1619 1287 28 20 95.670830 16.5 1 45 1 16 6 1793 1279 80 24 93.867119 $4,0005 1 45 1 16 7 1882 1284 20 16 94.365868 in5 1 45 1 16 8 1910 1284 44 16 96.651588 ones 1 45 1 16 9 1961 1280 67 21 95.370239 trade.4 1 45 1 17 0 923 1306 1132 46 -1 5 1 45 1 17 1 923 1322 6 19 76.204697 15 1 45 1 17 2 1019 1321 32 21 63.825996 a.5 1 45 1 17 3 1163 1323 34 18 77.385490 445 1 45 1 17 4 1312 1306 34 46 85.253868 30.5 1 45 1 17 5 1483 1322 22 21 80.372826 175 1 45 1 17 6 1620 1323 36 20 70.918289 10.65 1 45 1 17 7 1832 1311 34 20 44.003620 Mr.5 1 45 1 17 8 1879 1310 127 27 71.401924 Suprenart,5 1 45 1 17 9 2018 1311 37 20 96.451332 NY4 1 45 1 18 0 933 1357 724 23 -1 5 1 45 1 18 1 933 1357 117 21 25.678772 9427,5 1 45 1 18 2 1164 1357 29 21 82.749100 715 1 45 1 18 3 1318 1358 53 21 67.891495 12.615 1 45 1 18 4 1482 1360 5 19 82.059692 15 1 45 1 18 5 1615 1359 42 21 80.726120 30.54 1 45 1 19 0 1018 1391 1081 35 -1 5 1 45 1 19 1 1018 1393 40 22 86.988869 6725 1 45 1 19 2 1154 1405 26 9 40.852009 “1.5 1 45 1 19 3 1328 1395 40 20 45.237793 7m5 1 45 1 19 4 1482 1396 22 20 75.095764 145 1 45 1 19 5 1629 1396 18 20 74.641968 2.5 1 45 1 19 6 1792 1391 64 35 85.646706 What5 1 45 1 19 7 1874 1393 4 19 85.646706 |5 1 45 1 19 8 1897 1393 63 26 15.929604 realty5 1 45 1 19 9 1977 1392 40 21 94.417229 likes 1 45 1 19 10 2032 1393 67 20 95.074036 about4 1 45 1 20 0 1019 1417 1079 44 -1 5 1 45 1 20 1 1019 1430 56 21 69.723145 27515 1 45 1 20 2 1152 1417 28 43 89.581757 35.5 1 45 1 20 3 1310 1418 36 43 58.645042 48:5 1 45 1 20 4 1482 1432 19 20 81.408966 15 1 45 1 20 5 1631 1432 31 21 72.086761 5.55 1 45 1 20 6 1794 1423 71 26 81.583122 Indigo5 1 45 1 20 7 1890 1419 22 43 58.707638 135 1 45 1 20 8 1916 1424 64 32 79.590454 that5 1 45 1 20 9 2004 1424 63 20 94.822075 when5 1 45 1 20 10 2093 1424 5 19 46.968208 |4 1 45 1 21 0 922 1448 1178 50 -1 5 1 45 1 21 1 922 1468 6 20 65.777031 15 1 45 1 21 2 1018 1448 40 50 25.969864 $5.15 1 45 1 21 3 1163 1467 32 21 95.060371 935 1 45 1 21 4 1312 1449 33 49 23.276184 %6.5 1 45 1 21 5 1481 1468 24 21 59.929604 165 1 45 1 21 6 1628 1470 7 20 20.839226 c5 1 45 1 21 7 1792 1454 82 21 84.671623 started5 1 45 1 21 8 1887 1458 63 23 93.300537 using5 1 45 1 21 9 1963 1455 14 20 49.296497 &5 1 45 1 21 10 1990 1454 54 21 95.461349 from5 1 45 1 21 11 2057 1454 43 26 95.461349 day4 1 45 1 22 0 922 1491 1179 50 -1 5 1 45 1 22 1 922 1504 5 20 92.975395 15 1 45 1 22 2 1017 1503 57 21 42.832008 474i5 1 45 1 22 3 1166 1505 15 20 34.165207 1.5 1 45 1 22 4 1318 1505 27 20 93.341812 16.5 1 45 1 22 5 1474 1491 30 45 70.291939 265 1 45 1 22 6 1628 1507 18 19 89.264481 6.5 1 45 1 22 7 1792 1520 56 21 54.086845 eesy5 1 45 1 22 8 1875 1516 22 20 9.953369 '05 1 45 1 22 9 1923 1520 43 17 93.474098 uses 1 45 1 22 10 1993 1516 43 20 93.474098 ands 1 45 1 22 11 2063 1516 38 20 95.404839 thea 1 45 1 23 0 921 1536 1179 41 -1 5 1 45 1 23 1 921 1541 6 19 0.000000 L5 1 45 1 23 2 1016 1540 48 21 81.504601 41.55 1 45 1 23 3 1145 1536 48 36 93.325562 26.15 1 45 1 23 4 1328 1541 46 21 74.527405 7455 1 45 1 23 5 1478 1537 31 35 76.847961 27!5 1 45 1 23 6 1618 1537 45 36 60.401337 1$.7.5 1 45 1 23 7 1788 1538 108 39 94.142319 programs 1 45 1 23 8 1999 1547 101 25 96.696159 provides4 1 45 1 24 0 921 1570 1179 37 -1 5 1 45 1 24 1 921 1577 5 19 81.057098 15 1 45 1 24 2 1017 1573 98 29 11.964020 24.58%5 1 45 1 24 3 1163 1574 79 28 21.583397 8.9895 1 45 1 24 4 1306 1570 107 37 32.474045 51.99%5 1 45 1 24 5 1478 1578 6 21 94.997063 25 1 45 1 24 6 1618 1578 28 20 96.526230 10.5 1 45 1 24 7 1993 1578 107 25 83.134323 ready-to-4 1 45 1 25 0 1037 1608 1062 34 -1 5 1 45 1 25 1 1037 1619 79 22 95.829895 PAST5 1 45 1 25 2 1128 1620 231 22 96.384621 PERFORMANCES 1 45 1 25 3 1370 1620 81 22 94.136986 DOES5 1 45 1 25 4 1463 1621 64 21 96.291634 NOT5 1 45 1 25 5 1790 1608 63 20 11.648315 ade5 1 45 1 25 6 1911 1608 87 21 33.962540 models5 1 45 1 25 7 2026 1604 12 48 44.077065 =5 1 45 1 25 8 2056 1608 43 20 60.669075 anda 1 45 1 26 0 1045 1643 984 49 -1 5 1 45 1 26 1 1045 1657 189 22 95.694481 GUARANTEES 1 45 1 26 2 1246 1658 121 21 95.980385 FUTURES 1 45 1 26 3 1379 1658 140 22 95.052315 RESULTS5 1 45 1 26 4 1791 1643 24 19 69.732178 Po5 1 45 1 26 5 1850 1643 26 46 41.071621 GS5 1 45 1 26 6 1895 1669 81 23 61.102543 Wéson,5 1 45 1 26 7 1989 1668 40 22 96.389534 OH4 1 45 1 27 0 911 1692 735 20 -1 5 1 45 1 27 1 911 1692 113 18 43.111366 (Amounts5 1 45 1 27 2 1035 1693 61 18 57.493507 listed5 1 45 1 27 3 1106 1696 92 15 94.898567 assumes 1 45 1 27 4 1208 1696 26 15 92.645119 ar5 1 45 1 27 5 1246 1695 59 16 87.789154 initia:5 1 45 1 27 6 1317 1695 128 17 49.020126 investmen?5 1 45 1 27 7 1456 1697 45 15 94.451675 sizes 1 45 1 27 8 1511 1693 21 18 95.740944 of5 1 45 1 27 9 1541 1692 42 20 54.300316 $105 1 45 1 27 10 1594 1693 52 19 25.604996 990;4 1 45 1 28 0 1002 1728 552 23 -1 5 1 45 1 28 1 1002 1728 201 21 47.045341 msx1_m05.mad5 1 45 1 28 2 1213 1740 7 4 90.085320 -5 1 45 1 28 3 1231 1729 323 22 9.298088 AOV.ARV.IFSIA.OCR.SFA2 1 46 0 0 0 852 1073 16 689 -1 3 1 46 1 0 0 852 1073 16 689 -1 4 1 46 1 1 0 852 1073 16 689 -1 5 1 46 1 1 1 852 1073 16 689 95.000000 2 1 47 0 0 0 1697 1598 11 167 -1 3 1 47 1 0 0 1697 1598 11 167 -1 4 1 47 1 1 0 1697 1598 11 167 -1 5 1 47 1 1 1 1697 1598 11 167 95.000000 2 1 48 0 0 0 851 1753 856 12 -1 3 1 48 1 0 0 851 1753 856 12 -1 4 1 48 1 1 0 851 1753 856 12 -1 5 1 48 1 1 1 851 1753 856 12 95.000000 2 1 49 0 0 0 1049 1821 462 32 -1 3 1 49 1 0 0 1049 1821 462 32 -1 4 1 49 1 1 0 1049 1821 462 32 -1 5 1 49 1 1 1 1049 1821 8 6 93.915695 i5 1 49 1 1 2 1178 1830 13 22 85.586739 r5 1 49 1 1 3 1275 1821 45 32 95.745285 Traini5 1 49 1 1 4 1456 1822 55 31 95.342369 ina2 1 50 0 0 0 908 1908 741 156 -1 3 1 50 1 0 0 908 1908 741 156 -1 4 1 50 1 1 0 908 1908 741 36 -1 5 1 50 1 1 1 908 1908 54 28 96.632523 We5 1 50 1 1 2 972 1914 53 22 95.084915 ares 1 50 1 1 3 1036 1915 71 21 96.852211 now5 1 50 1 1 4 1116 1909 105 35 96.088181 taking5 1 50 1 1 5 1232 1909 137 28 87.816826 seminars 1 50 1 1 6 1378 1910 211 28 0.000000 reservations5 1 50 1 1 7 1599 1910 50 28 96.908005 fora 1 50 1 2 0 1057 1950 441 35 -1 5 1 50 1 2 1 1057 1950 351 35 35.081161 October5 1 50 1 2 2 1210 1946 73 51 93.080971 22nd5 1 50 1 2 3 1299 1946 18 51 93.080971 &5 1 50 1 2 4 1333 1946 73 51 93.341049 23rd5 1 50 1 2 5 1415 1952 83 33 94.705643 19994 1 50 1 3 0 1041 1993 474 34 -1 5 1 50 1 3 1 1041 1989 163 50 95.520615 November5 1 50 1 3 2 1224 1989 68 50 93.205200 12th5 1 50 1 3 3 1307 1994 18 32 93.205200 &5 1 50 1 3 4 1341 1989 88 50 95.040855 13th,5 1 50 1 3 5 1441 1989 76 50 95.040855 19994 1 50 1 4 0 1082 2035 394 29 -1 5 1 50 1 4 1 1082 2035 172 28 91.902168 December5 1 50 1 4 2 1264 2050 11 6 93.103905 -5 1 50 1 4 3 1285 2042 43 22 95.585800 no5 1 50 1 4 4 1338 2036 138 28 96.461136 seminar2 1 51 0 0 0 907 2119 745 114 -1 3 1 51 1 0 0 907 2119 745 114 -1 4 1 51 1 1 0 907 2119 745 35 -1 5 1 51 1 1 1 907 2115 81 44 96.291023 Wants 1 51 1 1 2 1002 2115 33 44 96.389000 to5 1 51 1 1 3 1049 2115 49 44 96.565903 sees 1 51 1 1 4 1118 2126 13 21 92.571487 a5 1 51 1 1 5 1148 2115 60 44 92.571487 lives 1 51 1 1 6 1218 2119 434 35 96.500206 presentations 1 51 1 1 7 1442 2115 33 44 92.613998 of5 1 51 1 1 8 1493 2115 162 44 90.664116 MicroStar4 1 51 1 2 0 929 2161 702 37 -1 5 1 51 1 2 1 925 2157 147 45 95.996017 products5 1 51 1 2 2 1090 2157 30 45 95.941086 at5 1 51 1 2 3 1135 2168 15 22 94.816978 a5 1 51 1 2 4 1165 2157 135 45 94.816978 locations 1 51 1 2 5 1315 2157 72 45 93.815826 near5 1 51 1 2 6 1405 2157 75 45 93.815826 you?5 1 51 1 2 7 1495 2157 79 45 95.816658 Then5 1 51 1 2 8 1588 2157 46 45 96.418678 go4 1 51 1 3 0 1041 2203 475 30 -1 5 1 51 1 3 1 1037 2199 42 45 96.251259 On5 1 51 1 3 2 1097 2199 57 45 96.251259 thes 1 51 1 3 3 1172 2199 75 45 96.413406 Roads 1 51 1 3 4 1262 2199 72 45 93.291786 with5 1 51 1 3 5 1347 2203 169 30 88.832466 Microstart2 1 52 0 0 0 924 2268 710 96 -1 3 1 52 1 0 0 924 2268 710 96 -1 4 1 52 1 1 0 924 2268 710 55 -1 5 1 52 1 1 1 920 2264 105 63 85.675018 ©19995 1 52 1 1 2 1046 2264 158 63 88.377098 MicroStar5 1 52 1 1 3 1224 2264 148 63 93.254974 Research5 1 52 1 1 4 1387 2289 16 27 93.112961 &5 1 52 1 1 5 1424 2264 132 63 96.332512 Trading,5 1 52 1 1 6 1571 2264 63 63 94.897301 inc.4 1 52 1 2 0 1124 2329 313 35 -1 5 1 52 1 2 1 1120 2325 48 44 94.210449 All5 1 52 1 2 2 1182 2325 92 44 96.489998 rights5 1 52 1 2 3 1292 2325 147 44 95.204712 reserved2 1 53 0 0 0 389 352 20 2476 -1 3 1 53 1 0 0 389 352 20 2476 -1 4 1 53 1 1 0 389 352 20 2476 -1 5 1 53 1 1 1 389 352 20 2476 95.000000 2 1 54 0 0 0 391 2800 1802 47 -1 3 1 54 1 0 0 391 2800 1802 47 -1 4 1 54 1 1 0 391 2800 1802 47 -1 5 1 54 1 1 1 391 2801 196 36 91.119865 http://www.5 1 54 1 1 2 593 2800 719 47 86.405006 microstar-research.com/home/index2.htm5 1 54 1 1 3 2049 2801 144 29 95.975769 10/15/99 MicroStar Research & Trading - Indigo Stock Performance Test Page | ot 2 Complaint Exhibit B Indigo Stock Test Here are some of Indigo's recent positions: Recent VISX Trades ENTRY EXIT R ENTRYICURRE! DATE DATE |SYMBO SIT PRICE] PRICE PROFIT 08/26/90 | 06/30/90" [AMZN T $ 687 06/26/99 | 06/30/09° HORT $ 682 06/27/99 | 06/30/99° HORT $270 08/28/99 | 06/30/99° t HORT $ 507 08/27/99 | 08/30/99" EBAY HORT $579 08/27/99 | 08/30/99° HORT 82.7 76.12% $765 08/26/99 | 08/30/99* [LU SHORT 66.37: 64.3149 $279 08/26/99 | 06/30/99° IMSPG HORT 31.56% 28.938 $800 08/26/99 | 08/30/99° YHOO [SHORT {152.68 143.814 $547 *CLOSED POSITION:

$10,000 INITIAL PURCHASE EACH OF 9 STOCKS (AMZN, AOL. BBY, CMGL ZBAY, EXDS, LU, MSPG. YHOO) 1999 ANNUALIZED - PAST PERFORMANCE “OFS NOT GUARANTEE FUTURE RESULTS Enter your stock symbol below to learn how Indigo will maximize your profits and reduce your risk! We'll send you detailed market statistics, yearly performance and recent trade listings.

(All fields marked with a * must be completed to process your stock test.) *Stock Symbol: [Test Mr. © Mrs. © Ms. © *First Name: |Greg Middle Initial: cm *Last Name: Nash *Telephone: 941)918-8268 Organization: |MicroStar * Address: {8302 S. Tamiami Trail *City: Sarasota US Residents - Please leave Province blank. http://www.microstar-research.com/home/stocktest/msxquote. shtml 10/16/99 Complaint Exhibit C Tampa Bay's Augmast 1996 Click, Click, You’re Rich? It costs more than chump change, but Indigo - Blue Chip Investment Strategies, the investment management software program (actual cost: $2,720) developed by Sarasota’s MicroStar Research & Trading, Inc., has done “phenomenally well” since it was introduced in 1995, says sales manager Greg Roper.

“With this program, you don’t shoot yourself in the foot by second-guessing,” he says. “It’s not emotional; it’s not greedy.” Click on its signal update, and Indigo instructs on which secuntties to buy and/or sell at what prices. “Those instructions are based on the internal research and analysis that the program does every day,” Roper says. “It gives the individual investor the same edge in terms of technical research and trading pattern analysis that the big brokers and large institutional traders have,” Roper says.

Indigo isn’t a trading program, however. Investors have to use a broker or online trading service to buy and sell. , Now in its fourth, more user-friendly version, Indigo evolved from the earlier career of MicroStar president and chief analyst Frank J. Alfonso, a CPA who developed models while trading soybean futures on the Chicago Board of Trade 25 years ago. MicroStar has other products that provide market trading programs for futures, bonds, and the Standards & Poor Index. The program continues to evolve. “We update at least once a year, changing names, adding portfolios. We put all new information on our Web site (http://www.microstar-research.com), and Indigo owners can download the latest models free.” Roper said that by September, Indigo should be available online as a subscription service. MicroStar’s clients have seen their conservative portfolios jump “40 percent annually over the past three years, while most aggressive portfolios with hot internet stocks have gone up several" hundred percent, “ Roper says.

The company itself is jumping. “We're about 28 people now, and we’ve just about quadrupled our office space since we opened in Sarasota in 1995,” says Roper. “What our programs teach you to do is diversify.

With this program, you don’t put all your money on 17 black and hope it tums again.” - by D.J. Wilson http://www. microstar-research.com/home/reviews/maddux.htm 2/11/2000 Complaint Exhibit D - Page 1 Real Pee i lee ReabResults 6 FREE STOCK TEST Indigo ... A powerful easy to use Dare to Compare ! computer trading program Go ahead, enter your stock and designed for individual how long you have been trading ~=—s in ve Stors. Fully researched and it. We'll run it through the Indigo program and youllbe surprised Fe@ady-to-trade, the program how much money you should ~—=»—s rOvides you with 100% have made! ° . .

Call Now: objective signals that 800 315-5635 consistently beat the market! Don't wait! For immediate results: Call Now: 800 315-5635 Listen to what some of our customers have to say. “Il started with $2,500 in a margi: account Sept. 8, 1998 with the Growth4. On Dec. 15 1998, added another $2,500 to my account and started using Internet3. Because of my concern with the internet stocks being overvalued, | transferred to Growth7. The following are my transactions to date (Jan. 20, 1999). Total equity after 4 1/2 months 1s $12.575 on a $5,000 investment. Great Program!” P. Lowry, KS “I began trading with about $30,000. | have made about $210,000 using the program in the past 5 months. Since 1/19/1999, | have made a 200% profit in about 80 days!!''' On occasion, | try to improve on the program by buying a stock earlier or later than the program would signal - this is almost always a bad decision. !f you can just follow what the program tells you to do, you will make money.”

DO. Heacock, VA “As an investor for ten years, ! wish indigo was around when | started. The Model and Portfolio test functions are easy to use and helped me pick 4 winning [Potfolio’s in no time. It is an excellent program and paid for itself in a short time. | think it's underpriced!® J. Petitti, NY Indigo will quickly update your stock and mutual fund data, automatically analyze the markets with scientifically tested investment methods, and get you into winning stocks and mutual funds... all in less than 10 minutes a day! “| began using the program in October 98, and as of the end of January 99, | am $3,000 short of my SECOND DOUBLE (Making 300% retum on initial investment). Your program (indigo) has paid for itself over “twenty” times in three months, and it couldn't be easier to use. It is uncanny how it “knows” when to get in and out.~ J. Spann, CA “| made $2,100 with indigo in the last 5 weeks. The Technical support is excellent.Easy portfolio management. Research and testing is easy and complete The staff is helpful and frléndty, especially for beginners to Indigo.” Co Oe ec naman http://www.microstar-research.com/home/testimony’testimony.htm 2/11/2000 Addy VOLVED WUD DOD Wit’, _ Compiaint Exhibit D - Page 2 we. UESctan ' |5 1 5 1 1 2 902 453 62 22 95.207184 have5 1 5 1 1 3 973 451 92 24 95.982468 several5 1 5 1 1 4 1074 452 65 22 96.823654 others 1 5 1 1 5 1149 456 127 23 96.643669 programs.5 1 5 1 1 6 1288 451 4 21 95.639450 |5 1 5 1 1 7 1303 450 40 23 96.516029 still5 1 5 1 1 8 1353 450 63 22 96.835190 have5 1 5 1 1 9 1425 451 23 21 96.856064 to5 1 5 1 1 10 1457 449 85 22 96.484009 decides 1 5 1 1 11 1550 448 73 23 96.634354 which5 1 5 1 1 12 1633 448 67 23 96.965897 stocks 1 5 1 1 13 1710 450 23 21 96.590813 to5 1 5 1 1 14 1743 448 64 23 96.669830 trades 1 5 1 1 15 1816 426 102 68 17.893257 amongl4 1 5 1 2 0 876 481 987 33 -1 5 1 5 1 2 1 876 491 70 23 95.814980 many5 1 5 1 2 2 955 485 96 29 57.225975 signals.5 1 5 1 2 3 1062 484 76 29 94.719276 indigo5 1 5 1 2 4 1148 484 19 22 95.751694 is5 1 5 1 2 5 1177 489 64 18 97.003784 more5 1 5 1 2 6 1251 483 106 28 96.507172 powerful5 1 5 1 2 7 1367 484 46 22 96.863831 ands 1 5 1 2 8 1424 482 167 24 65.687866 accurate.5 1 5 1 2 9 1551 477 36 41 65.687866 Thes 1 5 1 2 10 1601 487 62 18 95.533173 eases 1 5 1 2 11 1672 481 25 23 96.921997 of5 1 5 1 2 12 1705 487 46 17 93.154297 uses 1 5 1 2 13 1760 482 46 22 93.154297 ands 1 5 1 2 14 1816 481 47 23 96.467560 fast4 1 5 1 3 0 876 515 994 32 -1 5 1 5 1 3 1 876 519 119 28 96.134666 operations 1 5 1 3 2 1005 519 66 28 96.994186 gives5 1 5 1 3 3 1081 524 39 16 96.923172 me5 1 5 1 3 4 1130 518 38 22 96.762009 thes 1 5 1 3 5 1177 517 138 23 96.603737 confidence5 1 5 1 3 6 1325 519 23 21 96.476952 to5 1 5 1 3 7 1358 517 53 22 94.514740 holds 1 5 1 3 8 1421 517 82 22 96.897392 stocks5 1 5 1 3 9 1512 516 80 28 78.591995 longer5 1 5 1 3 10 1601 517 48 21 95.684273 that5 1 5 1 3 11 1659 515 5 21 95.894600 |5 1 5 1 3 12 1675 515 69 28 96.817368 might5 1 5 1 3 13 1753 515 117 28 41.646935 ordinarily4 1 5 1 4 0 876 548 979 32 -1 5 1 5 1 4 1 876 554 37 22 93.303177 do.5 1 5 1 4 2 926 554 5 21 70.637459 t5 1 5 1 4 3 941 553 101 27 90.254738 recentty5 1 5 1 4 4 1050 552 37 22 96.984726 did5 1 5 1 4 5 1097 557 37 22 96.938301 my5 1 5 1 4 6 1143 551 46 22 96.615311 firsts 1 5 1 4 7 1199 552 64 22 91.803574 trades 1 5 1 4 8 1273 551 55 22 96.853355 from5 1 5 1 4 9 1339 551 39 22 93.272758 thes 1 5 1 4 10 1389 549 118 23 90.864212 intemet2.5 1 5 1 4 11 1519 550 5 21 88.055489 |5 1 5 1 4 12 1535 549 134 28 95.980255 purchased5 1 5 1 4 13 1682 549 44 22 96.698120 1355 1 5 1 4 14 1736 549 85 22 96.819962 shares5 1 5 1 4 15 1830 548 25 23 96.585716 of4 1 5 1 5 0 877 580 983 29 -1 5 1 5 1 5 1 877 587 84 22 96.040573 Excite.5 1 5 1 5 2 973 586 65 22 96.883118 Initials 1 5 1 5 3 1048 585 139 22 96.909737 investments 1 5 1 5 4 1197 585 48 22 96.473373 sizes 1 5 1 5 5 1255 583 127 25 42.041950 $6,428.945 1 5 1 5 6 1392 588 30 17 96.540756 on5 1 5 1 5 7 1435 583 115 22 96.376892 12/29/98.5 1 5 1 5 8 1562 582 55 23 96.695145 Sold5 1 5 1 5 9 1628 588 30 17 96.810104 on5 1 5 1 5 10 1672 582 92 22 96.316429 1/11/995 1 5 1 5 11 1774 583 23 21 96.316429 at5 1 5 1 5 12 1806 580 54 25 92.018188 $10.4 1 5 1 6 0 877 617 524 30 -1 5 1 5 1 6 1 877 620 93 23 96.756065 019.85.5 1 5 1 6 2 981 620 19 22 96.970215 A5 1 5 1 6 3 1010 619 62 28 96.058960 profits 1 5 1 6 4 1081 618 24 23 96.058960 of5 1 5 1 6 5 1114 617 123 26 95.430290 $3,590.915 1 5 1 6 6 1250 618 20 21 95.430290 in5 1 5 1 6 7 1284 618 26 22 96.420715 135 1 5 1 6 8 1320 617 81 28 92.944160 days!”3 1 5 2 0 0 877 652 189 26 -1 4 1 5 2 1 0 877 652 189 26 -1 5 1 5 2 1 1 877 654 19 22 95.810921 J.5 1 5 2 1 2 909 653 104 25 96.180283 Contant,5 1 5 2 1 3 1027 652 39 22 96.875183 NY2 1 6 0 0 0 612 392 246 326 -1 3 1 6 1 0 0 612 392 246 326 -1 4 1 6 1 1 0 612 392 246 326 -1 5 1 6 1 1 1 612 392 246 326 95.000000 2 1 7 0 0 0 680 721 758 31 -1 3 1 7 1 0 0 680 721 758 31 -1 4 1 7 1 1 0 680 721 758 31 -1 5 1 7 1 1 1 680 725 71 23 91.530548 Don't5 1 7 1 1 2 758 725 64 23 96.906151 wait!5 1 7 1 1 3 833 725 35 22 96.958199 Be5 1 7 1 1 4 877 730 33 17 96.917534 on5 1 7 1 1 5 920 724 42 23 96.917534 thes 1 7 1 1 6 971 724 64 28 96.644638 rights 1 7 1 1 7 1044 723 56 23 96.644638 sides 1 7 1 1 8 1109 723 27 22 96.728249 of5 1 7 1 1 9 1144 723 42 22 96.769051 thes 1 7 1 1 10 1196 723 93 22 96.425591 markets 1 7 1 1 11 1298 721 140 23 96.032524 tomorrow!2 1 8 0 0 0 775 761 568 201 -1 3 1 8 1 0 0 775 761 568 201 -1 4 1 8 1 1 0 775 761 568 42 -1 5 1 8 1 1 1 775 763 91 40 91.550407 Calls 1 8 1 1 2 886 764 121 39 95.977539 Now:5 1 8 1 1 3 1027 762 83 40 96.337120 8005 1 8 1 1 4 1127 761 216 40 96.912521 315-56354 1 8 1 2 0 931 827 177 57 -1 5 1 8 1 2 1 931 827 177 57 93.068794 Indigo”4 1 8 1 3 0 929 891 262 30 -1 5 1 8 1 3 1 929 894 102 27 89.635551 Investments 1 8 1 3 2 1078 887 65 45 25.445602 Soitw5 1 8 1 3 3 1157 887 38 45 96.758507 area 1 8 1 4 0 789 932 537 30 -1 5 1 8 1 4 1 789 934 70 22 68.461296 We'll change the way you invest forever.° Download a free demo: www.microstar-research.com Headquarters: 8302 South Tamiami Trail, Sarasota Florida 34238 phone: 941 918-8268 fax: 941 918-8168 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. http://www.microstar-research.com/home/testimony testimony. htm 2/11/2000 ~wlicrodiaf Kesearcn o& trading - Market Keport HEP. WWW Mietustar-reec ar Om gis eae Complaint Exhibit E MicroStar Market Report a1 Volume 5 Issue 37 July 7, 1999 INDIGO ONLINE (Which is representative of naige. investment Software) IS NOW UP 193% ANNUALIZED IN 1999 !!!!! THAT IS BEATING THE S&P 500 INDEX WHICH IS UP ONLY 26% , ANNUALIZED IN 1999 II!!! io_athm_msx1.mod (Excite@Home) 724% Average Annual Return since 1997 !!! 624% Annual Return in 1998 !!! 362% Annualized Return in 1999 vs. “only" 86% for buy/hold !!! LONG on 6/28/99 @ 52.750 TAKES PROFIT @ 56.938 on 7/06/99 and goes SHORT !!!!! io_lcos_msx1.mod (Lycos) 461% Average Annual Return since 1996 !!! 232% Annual Return in 1998 !!! 1,354% Annualized Return in 1999 vs. “only" 181% for B/H !!! LONG @ 92.500 on 6/28/99... now 103.812 II!!! Afraid to Trade Internets 277 Indigo's MSX method makes money in VOLATILE MARKETS in other sectors too...

jio_dg_oe2.mod (Dollar General) 90% Average Annual Return since 1990 !!! 84 Trades... 77% WINNING TRADES !!! Uses the “Over-Extended" method... for investors seeking High Returns with less trades than the active MSX method. 114% Annualized Return in 1999... 4 trades... all winners !!! LONG @ 26.000 on 6/01/99... now 30.813 I!!! “ msx_bby4.mod (Best Buy) 162% Average Annual Return since 1990 {!! 278% Annual Return ; in 1998 !!! 640% Annualized Return in 1999 vs. “only” 281% for Buy/Hold ! SHORT on 6/24 @ 64.00...takes PROFIT @ on 6/28/99 and goes LONG @ 62.688... now 77.250 [IHI!! THE MARKET IS ON A “BULL RUN" RIGHT NOW... WHEN EVERYONE WAS WORRIED ABOUT THE MARKET 3 WEEKS AGO... INDIGO WAS PRODUCING PROFITABLE BUY SIGNALS I!!! DON'T MISS THIS MOVE... GET INDIGO TODAY II!!! PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS 1 of 1 9/14/99 4:56 PM Complaint Exhibit F $10,000 to over $10,000,000 — with...

Indigo's RSX Model Cede rzreaeetcseeos ese Boe nseannnar THE INDIGO ADVANTAGE 10,Stock RSX “Model Performance $10,000 INITIAL INVESTMENT 1/2,90 Imayine earning over 10 millien NSUML RATE CE RE" 2 dollars in profits since 1990 on 5 TOA only 4 S10,U00 original investment, That's what Indigo's 10- 1990 $2001 20.07% = 8.27% 60.00% 11.99% o@ eet eee east oewm emer eeramraae Stock Relative Strength Model 1 HTS S82 TAA 4 50.00% LTS RSX could have produced for [M2 MO MX UK 6 asm nay you... an average annual re- 1993 $43,635 105.86% 97.16%) 0S 80.00% 30.61% f Se, ual 904 $0.07 8K LS HON 8a turn of over © per year: 95 $290073 Shoe ee 4 too eT Indigo... an easy-to-use, fully | Sosa 775% say 5 coos aoe] EE researched computer trading WAT S1ESAN2S TORTS 31.70% $l program designed to provide $998 $5,.725.787 319.70% 26.10% 3 OTR CHB individual investors profitable [lee Su000.62s 1.16% 2416% iad 100% objective trading signals each day. ona s.. re ) RW 2 ae eee ee Indigo's easy-to-use soltware | S47 s7e7na 25766 $1,405 will quickly update your stock’ mean mains xen unl 8.63 was $5,629 fund data, automatically anal- 0 WG Lomp 25511 270831578 ; . MUS $8058 YHOO Long 32.625 87.375 $7,598 yze the markets with the scientifically tested trading models ]'M0%? S40 MS Lom ears sets (7m “ g moc 100403 SANS YHOO Long 45.000 172.062" $71,208 provided, and get you into re _diverec2! moe ‘Open Fenton Winning stocks and funds... OOS Weave ot Vit meaner, Reon be. Noam ante right now! Se awa | CALL NOW:

| 1-800-315-5635 LOW RISK | www.microstar-research.com Star * & Trading, inc.

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Here are a few dynamic performances from Indigo for 1999: 77.19% trading AOL (America Online) 71.99% trading BGEN (Biogen) 62.48% trading HD (Home Depot) {All fields are required.) Stock Symbol: [Lu | Mr. @) Mrs. © Ms. O FirstName: {| Bryan | LastName: | Kessier —] Country: | United States jv] Telephone: | 202-326-3061 | Email: |[email protected] | | _SUBMITSTOCK TEST | Indigo Investment Systems’ Privacy Policy: We will not release, sell or divulge in any manner, any personal information you submit to this site. The information you submit is for intemal use only and by submitting this form you are providing your consent to be contacted by an Indigo Investment Systems representative via telephone or email. . os Indigo Investnent Systems, Inc. formerty known as MicroStar Research & Trading, Inc. Indigo © 2000 All rights reserved disclaimer | privacy statement Systema, inc 8320 S. Tamiami Trail, Sarasota, FL 34238; call toll-free: 1-800-315-5635 ry $/9/2000 L100 ASS UZO LavesuMent Sy siete, tie cps Lee . Complaint Exhibt H page 2 of 2 Fone Fi. : rn et Barkers Suppers ta a Stock Test Stock Performance Test Results for Lucent Technology - LU The results shown below are based upon an initial investment size of $10,000. The trading period is indicated by the dates below in the blue bar. The net profit includes interest and compounded equity.

Performance Summary )' 16G5 . Decemoer 31. 1 a05 Total Net Profit: $82,235 Total Trades: , 19 % Winning Trades: 78.95% Annual % Return: 80.83% Maximum Risk: 7.68% . Yearly Performance , Incigo Annual - Return A 1996 62.72 % 13.27 % 4 100.00 % 00 % 1997 59.60 % 31.01 % 3 66.67 % 5.64 % 1998 202.75 % 26.67 % 5 80.00 % 4.27% 1999 17.16 % 19.37% 7 71.43 % 6.66 % To find out how you can start making PROFITS like this... CALL INDIGO INVESTMENT SYSTEMS NOW!!! 1 - 800 - 315 - 5635 Performance results listed above and in all marketing materials represent simulated computer results over past historical data, and not the results of an actual account. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the resuits may have under-or-over compensated for the impact, if any, of. certain market factors, such as lack of liquidity. Simulated programs in genera! 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 those shown. Testimonial or actual account results presented do not necessarily reflect the results of ali users of the program. Past performance does not guarantee future results. Trading some indigo models represents a high risk speculative investment. Please read customer disclosure document before purchasing. < F ‘Lof2 3,9/2000 ELL 4% VOLUME 131 Decision and Order DECISION AND ORDER The Federal Trade 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 of 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 The respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of 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, 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 the respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34,, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Indigo Investment Systems, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida. The mailing address and principal VOLUME 131 Decision and Order place of business of Indigo Investment Systems, Inc. is 8302 S. Tamiami Trail, Sarasota, Florida 34238. 2. Proposed respondent Frank Alfonso is an officer or director of the corporate respondent. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporate respondent, including the acts or practices alleged in the complaint. His principal office or place of business is the same as that of Indigo Investment Systems, Inc. 3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER DEFINITIONS For purposes of this order, the following definitions shall apply:

1. "Clearly and conspicuously" shall mean as follows: A. Inan 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 VOLUME 131 Decision and Order duration, sufficient for an ordinary consumer to read and comprehend it.

B. 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 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 online services, “in close proximity” shall mean on the same Web page, online service page, or other electronic page, and proximate to the triggering representation, and shall not include disclosures accessed or displayed through hyperlinks, pop-ups, interstitials 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” shall mean any program, service, course, instruction, system, training, manual, computer software, or other materials involving the purchase or sale of stocks, mutual funds, currencies, commodity futures, options, or other financial instruments or investments.

VOLUME 131 Decision and Order 5. Unless otherwise specified, "respondents" shall mean Indigo Investment Systems, Inc.; a corporation, its successors and assigns and its officers; Frank Alfonso, individually and as an officer of the corporation; and each of the above's agents, representatives, and employees.

IT IS ORDERED that respondents, directly or through any corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any trading program, in or affecting commerce, shall not represent, in any manner, expressly or by implication: A. The amount of earnings, income, or profit, or the rate of return, that a user of such trading program could reasonably expect to attain;

B. The usual or typical earnings, income, profit, or rate of return, achieved by users of such trading program or any part thereof; or C. Any financial benefit or other benefit of any kind from the purchase or use of such trading program; 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 corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any trading program, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, VOLUME 131 Decision and Order A. That hypothetical or simulated earnings data represent actual trading results;

B. That users of such trading program can reasonably expect to trade with little risk; or C. The extent of risk to which users of the trading program are exposed.

Ill.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, trade name, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of Indigo Investment Software or any other trading program, 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, “STOCK [or CURRENCY, OPTIONS, ETC., as applicable] TRADING involves high risks and YOU can LOSE a significant amount 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 or by a self-regulatory organization. The requirements of this Part are not intended to, and shall not be interpreted to, exempt respondents from making from any other disclosure.

IV.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, trade name, or other VOLUME 131 Decision and Order device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any trading program, in or affecting commerce, shall not represent, in any manner, expressly or by implication, that the experience represented by any user, testimonial or endorsement of the trading program represents the typical or ordinary experience of members of the public who use the trading program 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 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 Indigo Investment Services, Inc., and its successors and assigns, and respondent Frank Alfonso 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; VOLUME 131 Decision and Order 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 for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations. VI.

IT IS FURTHER ORDERED that respondent Indigo Investment Services, Inc, and its successors and assigns, and respondent Frank Alfonso 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 three (3) years after creation.

VIL.

IT IS FURTHER ORDERED that respondent Indigo Investment Services, Inc, and its successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the corporation 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 VOLUME 131 Decision and Order subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation 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.

VII.

IT IS FURTHER ORDERED that respondent Frank Alfonso, 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 that involves investment trading programs or training. 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 Indigo Investment Services, Inc,, and its successors and assigns 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.

X, This order will terminate on March 7, 2021 or twenty 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 VOLUME 131 Decision and Order violation 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. XI.

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 Indigo Investment Services, Inc.

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 January 9, 2001 The Federal Trade Commission has accepted, subject to final approval, an agreement containing a consent order from Indigo Investment Systems, Inc., a corporation, and Frank Alfonso, its CEO (together, “respondents’’) settling charges that they engaged in a deceptive advertising campaign for Indigo, a stock trading program.

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 sold Indigo through ads in various media, including investment magazines, Internet banner ads, and three websites: www.microstar-research.com, www.msindigo.com, and www.indigoinvestor.com. According to the FTC complaint, respondents’ advertising falsely represented that Indigo earnings data described in the ads represent trades that were actually made and that resulted in the profits stated in the advertisements; that the annual returns for the years 1990 through 1999 enumerated in the advertisements were actually achieved by users of respondents’ Indigo trading program; and that users of respondents’ Indigo investment trading program can reasonably expect to trade with little financial risk. According to the complaint, the Indigo earnings data described on the site do not represent trades that were actually made and that resulted in the profits stated in the advertisements; instead, the data represent results of hypothetical trading and are prepared with the benefit of hindsight using historical data. The annual returns for the years 1990 through 1999 enumerated in the advertisements were not actually achieved by users of respondents’ Indigo trading program; instead, the annual returns are based upon hypothetical trades using historical data. Indeed, respondents’ Indigo trading VOLUME 131 Analysis program did not exist until 1995. Additionally, the complaint alleges, users of respondents’ Indigo trading program cannot reasonably expect to trade with little financial risk; indeed, consumers who trade in stocks risk a substantial loss of capital, and trading some Indigo models represents a high risk speculative investment.

The complaint further alleges that respondents made several unsubstantiated claims. It alleges that respondents’ advertising represented that most users of respondents’ Indigo trading program who have invested in conservative portfolios have achieved an annual return of 40% over the past three years; that most users of respondents’ Indigo trading program who have invested in aggressive portfolios with “hot” Internet stocks have achieved returns of several hundred percent; that testimonials appearing in the advertisements for respondents’ Indigo trading program reflect the typical or ordinary experience of members of the public who use the program; and that users of respondents’ Indigo trading program can reasonably expect to achieve substantial profits on a consistent basis, whether pursuing a conservative or aggressive trading strategy. Respondents, however, lacked a reasonable basis to substantiate these claims, according to the complaint.

The proposed consent order contains provisions designed to prevent respondents from engaging in similar acts and practices in the future. Part I of the order would require, with regard to the sale of any trading program, that respondents possess a reasonable basis for future representations about the amount of earnings, income, or profit, or the rate of return, that a user of such trading program could reasonably expect to attain; the usual or typical earnings, income, profit, or rate of return, achieved by users of such trading program or any part thereof; or any financial benefit or other benefit of any kind from the purchase or use of such trading program. Part II of the order prohibits respondents, in connection with sale of any trading program, from misrepresenting that VOLUME 131 Analysis hypothetical or simulated earnings data represent actual trading results; that users of such trading program can reasonably expect to trade with little risk; or the extent of risk to which users of the trading program are exposed.

Part III requires that future benefits claims be accompanied by the statement that “STOCK [or CURRENCY, OPTIONS, ETC., as applicable] TRADING involves high risks and YOU can LOSE a significant amount of money." Part IV prohibits respondents from representing that the experience represented by any user, testimonial or endorsement of the trading program represents the typical or ordinary experience of members of the public who use the trading program unless respondents can substantiate the typicality representation or they 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. The remaining parts of the order contain standard record keeping, order distribution, reporting, compliance, and sunsetting provisions.

The purpose of this analysis is to facilitate public comment on the proposed order, and 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