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CFTC urges financial newsletters to register as advisers

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CFTC urges financial newsletters to register as advisers07/03/95 WASHINGTON, D.C.--Futures regulators are cracking down on newsletter publishers they say are…


WASHINGTON, D.C.–Futures regulators are cracking down on newsletter publishers they say are printing financial trading advice without being registered to do so.

The Commodity Futures Trading Commission sent letters in early June to several newsletter publishers to urge them to register as commodity-trading advisers. Registration requirements include submission to a background check and fingerprinting.

Several CFTC officials said in a telephone conference call that their chief concern is that some newsletter publishers are charging hefty prices and, in return, giving specific trading advice. Some of these publications also run hotline services and refer clients to brokers, they said.

The only exemptions, CFTC officials said, are publications of general circulation, where trading advice is “solely incidental” to the information published. But newsletter publishers who printed mostly general information were not being targeted, officials said.

Many of the newsletter publishers contacted by the CFTC have responded, some by registering and some by giving the reasons why they believe they are exempt, the officials said. Some publishers have said that because they publish general information that is largely available elsewhere, they should not be subject to intrusive federal regulations, according to The Wall Street Journal.

The CFTC may file suit against those publishers refusing to comply, officials at the commission said. In such cases, the CFTC could seek monetary damages or cease-and-desist orders.

The Supreme Court overturned similar Securities and Exchange Commission rules requiring registration of stock-picking newsletters in the early 1980s.

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