Online Trading Academy (OTA) will have to pay millions in settlements after deceiving customers for years with claims that its services would lead to significant income, the Federal Trade Commission (FTC) announced Tuesday.
The FTC sued OTA in February claiming it used false or unfounded claims on how much people could earn from its services when marketing programs that cost as much as $50,000. OTA brought in $370 million in revenue over the last six years doing so, the FTC said.
According to the agency, OTA claimed instructors and salespeople were active and successful, using that as a testament to the supposed success of the program. The company also made customers requesting refunds sign a contract barring them from posting negative reviews.
“OTA pitched a get-rich-quick investment strategy using fake or unrepresentative testimonials, depictions of wealth, and implied promises of profits,” Andrew Smith, the director of the FTC’s Bureau of Consumer Protection, said in a statement. “OTA had no support for its lavish earnings claims, and that’s illegal.”
Under a settlement reached this week, OTA founder Eyal Shachar and others at the company will have to turn over assets and pay a fine of between $5 million and $9.1 million.
The settlement’s total monetary judgement amounted to $362 million, which is partially suspended because OTA is unable to pay it. Shachar will pay $8.3 million and surrender a number of vehicles to the FTC, including a Cessna 400 airplane, a 2006 Bentley Mulsanne, a luxury motorhome, a Cadillac Escalade and six minivans.
Customers who have used OTA’s services have 45 days to claim damages to the FTC and are eligible for refunds or debt forgiveness for loans used to purchase OTA’s services.