WASHINGTON — Wade Cook Financial Corp. was accused of failing to refund millions of dollars to investors who attended its stock trading seminars, as required by a 2000 settlement with U.S. regulators.
The Federal Trade Commission contends that Wade Cook and his Seattle-based company continue to make unsubstantiated claims of the returns that investors can reap with the trading strategies recommended during his "Wall Street Workshop" seminars.
The FTC sought civil contempt citations Wednesday against Cook and his company for failing to obey a 2000 consent order to stop making false and unsubstantiated claims and to pay refunds to customers who failed to recoup their seminar tuition from stock trades.
"There has been serious consumer injury in this case, and that injury must be addressed by the defendants," J. Howard Beales III, chief of the FTC's consumer protection staff, said Thursday.
In 2000, Wade Cook settled charges by the FTC and 13 states that the company made false claims that investors could earn a 20% monthly return on their investments by following his stock trading strategies.
Shares of Wade Cook Financial were up 1 cent to 19 cents in over- the-counter trading.
As many as 50,000 customers who paid $3,000 to $5,000 to attend the two-day seminars were covered by the settlement. As of Jan. 18, the company had mailed refunds to 132 customers, said FTC lawyer Eleanor Durham.
The FTC also asked a judge in Seattle to order Cook and his firm to place $5 million in a fund to be distributed to customers.
There was no comment from the company.