U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20486 / March 11, 2008
Securities and Exchange Commission v. Linda Woolf, David Gengler, Hands On Capital, Inc., and Lashaico, Inc., Civil Action No. 1:08cv235 GBL/BRP
SEC Sues Former "Teach Me to Trade" Workshop Speakers For Securities Fraud
The Securities and Exchange Commission today filed civil fraud charges against Linda Woolf and David Gengler, former speakers for "Teach Me to Trade" ("TMTT") securities trading workshops. The Commission also charged Woolf's and Gengler's corporations, Hands On Capital, Inc., and Lashaico, Inc. The Commission's complaint alleges that Woolf and Gengler made false and misleading statements in televised infomercials and investor workshops to dupe investors into believing they would make extraordinary profits trading securities if they purchased TMTT products and services. TMTT — a unit of Whitney Information Network, Inc., a publicly traded company based in Cape Coral, Florida — conducts nationwide investor workshops that purport to teach investors the secrets to making money in the stock market. Woolf and Gengler, both residents of Utah, misrepresented, among other things, their own success trading securities as well as the success rate of others who purchased TMTT packages that consisted of securities trading mentoring, software and classes.
The Commission's complaint alleges that during workshop presentations made between approximately 2003 and 2006 — some of which were captured on videotape — Woolf and Gengler used lies and misrepresentations in order to sell expensive TMTT packages of personal mentoring, software and classes for prices ranging from approximately $11,000 to $40,000. According to the Commission's complaint, Woolf and Gengler appeared in television infomercials portraying themselves as successful former TMTT customers. The complaint also alleges that at the workshops, Woolf and Gengler expanded on their false claims about their success as securities traders. They misrepresented to audiences that they themselves had purchased personal mentoring, classes and software to learn to trade, and quickly profited by trading securities. Woolf targeted retirees, among others. Gengler urged investors to liquidate their retirement accounts to follow TMTT strategies. Through false stories of their own success and false claims of a 96.5% success rate for TMTT students who purchased personal mentoring, courses and software, Woolf and Gengler convinced investors that they too would make money in the stock market if they followed TMTT's trading strategies that emphasized options trading and short-term swing trading.
In fact, the Commission alleges, Woolf's and Gengler's tales of trading success were not true. In reality, they are unsuccessful traders whose wealth came not from trading securities but from selling expensive TMTT packages. Woolf's and Gengler's claims about a 96.5% success rate of others who purchased certain TMTT packages and followed TMTT's trading strategies also had no basis in fact. The complaint alleges that Woolf reaped approximately $4 million from selling TMTT packages, and Gengler made approximately $2.25 million.
The Commission's complaint alleges that Woolf, Gengler, Hands On Capital, Inc., and Lashaico Inc. violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also seeks disgorgement of ill-gotten gains, civil money penalties and permanent injunctions enjoining the defendants from violating the antifraud provisions of the federal securities laws.
In a related action, the U.S. Attorney's Office for the Eastern District of Virginia today announced the filing of criminal charges against Woolf and Gengler based on their misrepresentations at TMTT workshops.
The Commission acknowledges the assistance of the U.S. Attorney's Office for the Eastern District of Virginia, the U.S. Postal Inspection Service, and the Florida Attorney General's Office.
The Commission's investigation is continuing.