NOTE: This website is where you can find advertising law information based on news briefs that appeared in past issues of Advertising Compliance Service, "Your Single Essential Advertising Law Resource," during the month of December 1998.
Two federal agencies, two national associations and 30 state securities regulators in the U.S. and Canada surfed over 400 web sites and Usenet group messages looking for bogus claims and illegal representations about investment opportunities. E-mail messages were sent advising that false investment opportunity claims, such as "IRA approved" or "IRA qualified," violate the law. FTC, Commodity Futures Trading Commission, North American Securities Administrators Association, and National Association of Securities Dealers Regulation, Inc. conducted the "Surf Day" on November 12, 1998.
As part of Surf Day, CFTC reviewed hundreds of Web sites, and identified dozens for follow-up review. These sites were promoting opportunities to invest in foreign currency and computer trading systems. CFTC has seen similar Internet promotion of opportunities to invest based on seasonal trends in the prices of commodities like heating oil and gasoline, and other publicly available and widely known information, like the weather effects of El Nino and La Nina.
As part of Investment Opportunity Surf Day, the North American Securities Administrators Association (NASAA) analyzed 1,000 unsolicited e-mail messages forwarded by investors to the group's new E-mail address email@example.com. NASAA received the e-mail messages between October 5, 1998 and November 12, 1998.
According to a June 1998 CommerceNet/Nielsen Internet demographic survey, the number of Internet users over the age of 16 in the United States and Canada has reached 79 million, up from 58 million just nine months earlier. Internet investing is also on the rise, says a report by Forrester Research--with over 3 million online trading accounts currently and an estimated 14 million accounts by 2002 with nearly $700 billion in assets.
To help consumers considering investing online, the FTC, NASAA, CFTC, NASD and SEC have launched an effort to educate consumers about precautions to take as they invest. Partners in this education campaign include web sites such as the Alliance for Investor Education [www.investoreducation.org], the Motley Fool [www.fool.com], Pathfinder.com, Fortune.com, Money.com, TheOnlineInvestor.com, Investorama.com, National Association of Investors [www.better-investing.org], Employee Benefit Research Institute [www.ebri.org], Small Business Administration [www.sba.gov], and The National Fraud Information Center [www.nfic.org].
In addition to FTC, CFTC, and NASD Regulation, securities regulators in the following jurisdictions participated in the Surf Day: Alabama, Arizona, British Columbia, California, Delaware, the District of Columbia, Hawaii, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Missouri, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Ontario, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.
(FTC Release, December 21, 1998.)
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