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Weiss Research’s Selective Statements About Profitability
12. During the relevant time period, Weiss Research disseminated advertisements prepared by Martin Weiss, Edelson, and others that gave examples of the profits those subscribers who followed the recommendations in Weiss Research’s premium services newsletters could earn. These solicitations were designed to attract new subscribers to Weiss Research’s premium services and persuade existing subscribers to subscribe to additional premium services. These advertisements, however, selectively highlighted profitable trades, omitted specific references to unprofitable trades, and presented an unrealistic picture of Weiss Research’s investment success.
13. Weiss Research, in promotional materials prepared by Martin Weiss, Edelson, and others, sometimes used selective, outdated, and/or hypothetical examples of specific returns that subscribers might have realized on individual trades had they followed Weiss Research’s recommendations, without advising that the overall return was or might not be profitable. For example, Weiss Research, in promotional materials disseminated until July 2003, claimed that subscribers “who followed our recommendations scooped up 400% profits,”
and also “bagged profits like 400% … 39% … 217% … 100% … 374% … 66% … 171% … 222%.” In other advertisements, Edelson told potential subscribers, “I cannot guarantee profits. This is a speculative service for your speculative money. But as you can see from the penny gold shares I’m eyeing right now, it’s not an understatement when I say you could make back the cost of the subscription fee 30…40…even 50 times over.” Because this publication carried a maximum subscription rate of $5,000 per year, this claim indicated that subscribers could profit by as much as $250,000 by following Weiss Research’s recommendations.
14. The overall performance of Weiss Research’s premium services did not support these profit claims. In fact, during the relevant time period, many subscribers who followed each Weiss Research trading recommendation – as Weiss Research encouraged its subscribers to do – experienced overall returns that were substantially lower than Weiss Research’s profit examples and most actually lost money. Although Weiss Research disclosed to subscribers that losses are possible, it did not include information on specific losing trades or disclose that, for the most part, its premium services newsletters had not been profitable for subscribers.