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Is Your Trading Room (YTR) GPT program a ponzi scheme?

Discussion in 'Scam Alerts' started by Lynne Fairhall, Feb 10, 2012.

  1. Lynne Fairhall

    Lynne Fairhall Private

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    Your Trading Room (YTR) began as a Forex educational company, with educational material on basic trading of Forex, indicators and strategies, and access to live trading rooms where moderators took live trades. They did a very good job at that. Access to the basic Platinum program cost $5k
    In August 2010 YTR introduced the Global Prop Trader Program (GPT), for a cost of $10k. This program offered “access to the company’s $5m trading account”;already proven non-discretionary trading strategies and indicators exclusive to GPT members that were to show exactly where to enter and exit trades; an exclusive trading room moderated by highly successful traders; additional training and education both from the trader in the trading room and extra videoed classes. Members were told that all they had to do was follow the trade calls made by the moderators and they would easily progress through the advancement levels while they learned to trade. This program was to be exclusive to a maximum of 40 members. GPT traders were to receive 90-95% of their trading profits. Maybe alarm bells should have rung! How does the company earn enough money to go on with a business plan like that?
    From the day the GPT trading room opened, it was obvious that nothing was in place. It wasn’t a proven system. No strategies were even devised, let alone written. It also soon became apparent that the successful traders weren’t using strategies that had made them successful. They were trading short term strategies that were being devised to attract new GPT members. The majority of trade calls failed.
    I once questioned the fact that we were sold the program on the basis that we could successfully advance by just taking the moderator trade calls, and I was scoffed at for being so naive. However, a YTR salesman stated in a chat group this week that that was still the sales line that they were told to use when selling the program.
    Indicators and strategies for the program simply didn’t work. For seven months a YTR indicator prevented members from opening range charts. The strategies presented were based on range charts (not native to the MT4 platform we were required to trade on), so we couldn’t trade the strategies. We complained and were disdainfully dismissed as whingers, until the complaints got so loud that YTR finally acknowledged that they’d caused the problem.
    There were several strategies all introduced very quickly. Moderators didn’t know them, so their trade calls weren’t successful. We were expected to learn the strategies and trade and progress. From what I’ve learned of successful traders, they choose a strategy that suits their personality and they focus on using that strategy and trading it well.
    GPT members were provided with an account located on the Totally FX servers. Totally FX has the same business address in Qld as YTR has.
    In about July 2011, the trading platform on which we were required to trade, began ‘freezing’ while we were in trades. One would try to close a profitable trade only to receive no response. Then, once the trade went into loss, the trade would be closed for a loss. Again we complained and were ignored. Eventually the problem became so great that one of the moderators threw a tantrum in the trading room when he couldn’t close a profitable trade. The GPT program was then suspended on November 13 while YTR said they were trying to find another data provider. So we’ve had no access to trade our accounts since then ( except in practise mode).
    What I’ve been able to find out is that YTR didn’t have a trading account set up. Les/Ray Freeman just controlled all the money. He spent whatever he wanted on whatever he chose. With no financial backing, our trading accounts were working on a demo server and anyone who did manage to make some trading profits, was paid out of company revenue.
    A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation. The system is destined to collapse because the earnings, if any, are less than the payments to investors. That’s exactly what YTR were doing, so YTR GPT program is a ponzi scheme.
    Yet another management board resigned from YTR on Wednesday February 1. The resignation of the Australian director can be confirmed by a search on ASIC at ASIC Free Company Name Search. YTR took GPT membership payments on Friday February 3. They may still be doing so for all we know.
    YTR was moved to the US from Australia in late 2010 or early 2011. Freeman’s stated aim since opening the company had been to take it to the States and make it huge. He employed a well known company, Daly, I think, to raise venture funding. They’ve been trying to raise funds for twelve months but haven’t been successful. When Bob Iaccino smelled a rat recently and withdrew his patronage, taking his well-heeled mates with him, Freeman was so gutless that he blamed the writer and others who had been emailing GPT colleagues warning them that something wasn’t right. He’s been trying unsuccessfully for a year to raise funds, but suddenly it’s my fault! How childish is that to blame those you’ve stolen from for the consequences of your actions.
    I might add, that I received a letter from YTR’s lawyer, Elizabeth Katkin, claiming that Freeman had no controlling interest in the company and threatening me if I didn’t shut up. The lawyer is the wife of one of the board members who resigned last week. I wonder if she’s changed her tune? She told a blatant lie and if I was in Colorado I’d have her charged for false and misleading conduct. I personally know shareholders who swear that Freeman is the controlling shareholder. YTR also threatened FPA if they didn’t remove an earlier post I made. YTR have since withdrawn that threat and the post wasn’t removed.
    Freeman emailed his moderators last weekend, telling them how wonderful they all are and promising them that he’s doing everything he possibly can to get the company up and running again. Pity he didn’t pay them their salaries from August last year. He’d been remiss in paying others ever since moving the company to the States. He hasn’t paid any superannuation of Australian employees (legal requirement in Australia) since the beginning of 2011 and several people in the Australian office hadn’t received wages for a couple of months. To me that’s ‘trading insolvent’. That’s illegal in Australia. I imagine it is also in the States.
    Freeman emailed YTR membership today saying that current negotiations with investors are going very well and he should be able to re-open YTR in seven days. The email is signed by the Shareholders. Funny, the shareholders whom I know have no knowledge of the current negotiations re anymore funding and certainly weren’t consulted about emailing the members with such optimistic words.
    As a very conservative estimate, Freeman had access to $10m over the last twelve months. It all appears to be gone. He has a history of failed business ventures in Australia and from one of those he still owes creditors $28m. He’s not allowed to be on the board of directors of a company in Australia. He still finds a way around that and gets others to be the face of YTR. He must be very charismatic. People with $10m to invest aren’t stupid. They’re not going to give their money over to the complete control of someone with that sort of business record.
    These are some links to confirm my claims about Freeman.

    Les Freeman - Australia | LinkedIn Les Freeman 'Brains at YTR'
    Australian Securities and Investments Commission - 04-416 Co-Develop property schemes to be wound-up
    Dilemma of a Brisbane business gone awry | Latest Business & Australian Stock market News | The Courier-Mail
    Incredibly, Mr Freeman, 47, may pitch a new business proposal to some of his personal creditors later this month.
    There is speculation that a repayment schedule for those owed money may be floated in relation to stockbroking business Your Trading Room, an entity registered by Mr Freeman in January.
    httphttp://www.theaustralian.com.au/archive/business-old/fincorp-saviour-in-29m-collapse/story-e6frg9gx-1111113243578
    Cookies must be enabled | The Australian
    4X Los Angeles - Live Events
    "Prior to that, he oversaw the collapse of at least two other schemes since 2002 and served as managing director of listed First Capital Group, which lost nearly $13 million under his guidance last year.
    There's more. Mr Freeman, his wife and several of their companies owe $1.27 million to three non-bank lenders, each of whom won court cases last month. Two of the claims resulted in default judgments after no defence was lodged
    Mr Failure Les Freeman strikes again | Latest Business & Australian Stock market News | The Courier-Mail
    Co-Develop | PropertyInvesting.com
    Your Trading Room | YourTradingRoom.com reviews and ratings by Forex Peace Army

    Los Angeles County Department of Consumer Affairs
    https://www.ftccomplaintassistant.gov/
    BASIC Details
    http://www.ihousenyc.org/s/707/alum_index.aspx?sid=707&gid=1&pgid=524 - YTR legal counsel married to Chairman?
    Make a complaint : Department of Justice and Attorney-General
    http://www.search.asic.gov.au/cgi-b...o=&a7=&a8=&a9=&a10=&a11=&a12=&a13=&start_date
    http://www.search.asic.gov.au/cgi-b...o=&a7=&a8=&a9=&a10=&a11=&a12=&a13=&start_date
    How to lodge a dispute :: Primary
    Australian Securities and Investments Commission - Contacting us
    To lodge official complaints, these are the necessary links
    Contact - CFTC
    Department of Corporations - Contact Us
    Australian Securities and Investment Commission https://www.edge.asic.gov.au/008/co...s=/t=bc85a2abc93d91659adbe5f983abe5309a14857a
    Australian Financial Ombudsman Home Page :: Primary
    Securities and Futures Commission Hong Kong - Securities and Futures Commission
    Would you lend this man money?
    From my point of view, I just want this man stopped from taking the savings of little people like myself.
     
  2. Pharaoh

    Pharaoh Colonel

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    Wow! So many details. :)

    A few of the links don't seem to be working. If you've got screenshots, can you post them?

    Is there any proof that the company did or didn't have a $5m trading account?
     
  3. oleo

    oleo Recruit

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    Hi,

    I have to agree with Lynn's post!

    I am also a GPT member and has to say goodbye to my $20,000 investment!


     
  4. carolcook6189

    carolcook6189 Recruit

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    Your Trading Room is a SCAM- Lynn was very thorough and accurate in her assessment of YTR- YTR is registered with the ASIC- I have contacted the ASIC to file a complaint and have their registered status removed- and I have contacted the Brisbane Times (where YTR's Australian office is based) to work with them on an article about YTR's fraudulent activities and hopefully to stop Mr. Freemen
     
  5. Lynne Fairhall

    Lynne Fairhall Private

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    Further information on deciding whether YTR GPT was a ponzi scheme or not

    I did wish to paste here a copy of the GPT Trader Advancement Table that appeared briefly on the Internet in a video by John Sheely, the head of the education at YTR. Unfortunately, I can't work out how to get the table here. I do have a copy of the entire video, but also can't work out how to post it here.
    What it shows is the advancement table where GPT traders were to be paid between 80% and 95% (avg 88.46%) of trading profits over the 13 trading levels. What Mr Sheely showed in particular, was that, with such a high payout level, at level 12, for example, YTR would have only made a total of $5,624 while they were risking $14,500 on the trader's trades. That is obviously unsustainable.
    Mr Sheely states that the GPT program, and many others on the market like it, are designed so that 80% of traders fail, and their membership fees go to support the trading of the few who actually succeed. He further states, that were the membership fees put to backing the client accounts then trading could be sustained, but that that was not the case at YTR, where the funds were spent.
    Mr Sheely states that his intention in joining YTR was to endeavour to better educate traders by sharing his wealth of knowledge, and thus ensure that the success rate was much higher than what is the norm in programs of this type, i.e., only around 20%. I doubt that the success rate of anyone progressing beyond level 3 in the YTR GPT program was, in fact, far less than the average 20%, and was more like 10%. Mr Sheely states that he was thwarted in his wishes/intentions to improve the education of traders. He pointed out that the experience of most of us in trading for months and getting absolutely nowhere with our trading, was only to be expected considering the design of the program and the conditions under which we were trading. One has to wonder if the faulty indicators and 'freezing' trade platform were put there deliberately to thwart us.
    In addition to Mr Sheely's video, a former IT staff member has stated recently in skype chat that all traders were moved back to demo a while back - at least August.
    Therefore, at least since August (2011) any trader profits have been paid out of company funds. That constitutes a ponzi scheme. August was the same time that moderators stopped getting paid, though Australian superannuation payments hadn't been made since about November 2010.
     
  6. vanizak

    vanizak Recruit

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    Lynn, interesting stuff you bring up here. I'm an early US investor, albiet a passive one in YTR - and am currently staring at a potentially big black hole in terms of a loss of my investment in YTR.

    That said, while I'll agree with you that Ray has a checquered past (to put it mildly), I will clarify that he had handed over the day to day operations of the company to the management and board - the 3 clowns that resigned recently. IMO, the biggest mistake Ray made was to let these executives take over the company - and the accounts. As an investor I was thrilled when Ray brought these executives in, however, while they were great on paper, they were simply incapable of producing ANY results. Maybe Ray has been a hinderance to management progress, but these guys were really terrible. They were incapable of either raising funding or making any progress with YTR - and Ray was extremely generous to them in terms of the terms he gave them to come on board. Looking at the presentations they put together to take to investors, I have to say I was completely shocked by how poor their 'story telling' was. Hard to imagine they had any form of success in their prior lives. These guys bascially emptied the company's accounts without raising any alarm bells, and then took the last bit out for themselves and resigned when Ray got back from vacation.

    Right now, while those clowns are gone, Ray is the only one scrambling to raise funding to keep YTR going. SO, at this point, while we can all get pissed off with YTR (you as a customer, and I as an investor), let's hope that Ray can pull some funding together to keep the platform and indicators going. I don't think he has any illusions that whatever stake he has in the company will be HUGELY diluted, but from my conversations with him, he appears to be very focused on keeping the company going - largely for the sake of the folks who are dependent on the company's platform. Bottomline is that ranting on about Ray isn't going to get any of us anywhere.
     
  7. Lynne Fairhall

    Lynne Fairhall Private

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    Response to Vanizak

    I don't know who you are Vanizak, and I have no personal beef with you. All I can say is that Les/Ray Freeman is a master of spin, and I think you've been spun. Now former staff of YTR, the board members who resigned on February 1 and the Australian shareholders, some of whom have acted as board members and contractors to YTR in the past, all got spun, and they admit it. Reputable people like John Sheely, a lawyer as well as an expert trader, believed Ray Freeman when he told staff that funds were coming and they would all soon be paid. Freeman controls the bank accounts solely. His wife does the company books. She owns their assets. Freeman had his lawyer tell me that he had no controlling interest in YTR whatsoever. It's all just total rot.
    He's ripped off many people in the past and stupidly he's continuing to do it in YTR. He had a great business going with the basic YTR educational program. But it just wasn't enough for him. Greed just overtook and he released the GPT program which John Sheely has proven to be designed for 80% of members to fail in. The membership fees of those 80% could have supported what in actuality at YTR was around 10% of successful traders. But no. Freeman couldn't even leave that money in the bank to back their trading accounts.
    YTR hired a large venture capital raising company early in 2011. They've had 12 months to raise funds. They haven't been able to. It's hardly fair to blame Nikolson, Waryn and Wade. Even if they did take what was left, there was less than $20k in the bank in August 2011, so I don't think they would have got much.
    Freeman was unable to pay staff from August 2011 yet he continued to trade. That's trading while insolvent. That's illegal.
    The YTR GPT program was run at least since August on demo servers and not in the live trading market. So profits paid to traders were paid from company money raised from the membership fees collected from an ever increasing number of new members. That's a ponzi scheme. That's illegal. Freeman must have known that these two activities were illegal, yet he continued to trade and to sell memberships right up to February 3. We are not aware if he may still be selling memberships.
    Sorry, I don't like to be disagreeable, but look at the people who believed what Freeman told them and admit they were wrong in that belief. I'm afraid you're one.
     
  8. Lynne Fairhall

    Lynne Fairhall Private

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    Good on you for taking action Carol

    I have also contacted ASIC, The Financial Ombudsman, The California Futures Trading Commission and The California Department of Corporations. I have notified the Brisbane Courier Mail Business section as they have previously run stories on the escapades of Les/Ray Freeman. I doubt that we have a snowflakes chance of ever seeing our money again or ever getting to trade a YTR prop trading account, but I feel it is a moral obligation of those with knowledge to do everything we possibly can to stop this man from ripping off even more customers and investors.
     
  9. rayandi

    rayandi Recruit

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    sorry to hear that Lynn and others. I went into trading room fro 2 weeks and thought the calls were great in the room, glad i didnt go thru with it and decided to try and learn from the net instead, i hav been scammed a few times and know how u feel . try not to get too depressed about it and try to move on
     
  10. Globalfx

    Globalfx Private

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    Yes, Les Freeman has been at it a while, and his profile failure is all over the web. Always do due diligence on any investment, the web makes it easy.

    YTR wasn't always a scam, and it was never very successful either. I was started right before the financial crisis, very bad timing. Right out of the gate they had huge staff/ overhead.

    So there was no company history or background details on the web, but you could buy a franchise for 50K!

    Membership was always lacking and they sought to sell dreams to everyday folk mom and pops and kids with their feeding frenzy sales seminars, which are very popular in Australia with the self help motivational "unleash the Tony Roberts giant within crowd."

    "you can do it" trade forex, be your own boss! make a 6 figure killing, but first pony up 5 figures. They sold to people who had no real interest in trading, just a fancy

    Everyday people trading with 100:1 leverage, and just when all the major banks just blew up trading 40:1 and were forced to spin off their prop desks by subsequent gov't legislation.

    The economy sucks, every where except maybe Australia, and YTR membership and monthly dues still just never really even covered the overhead of the 20+ employees.

    So YTR spawns a new more serious program: GPT, doing what Goldman Saks now can't by law!

    You now have a retail quasi educational forex "firm" offering 90% payout on a 5M margin account on a cheesy MT4, broker plug-in ridden retail platform with an ante of 20K to demo trade?.... Really? What's wrong with this picture?

    I feel miserable for your losses, just like they're mine, I know that hollow violated feeling of regret spiked with fits of anger.

    But you learn and move on..... just like a bad trade.

    There are solid prop firms and mentors out there,

    and if you're serious about trading and disciplined enough to really work hard

    I can give you informed direction
     

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