Sacramento, California - California Attorney General Xavier Becerra today announced a lawsuit against a live chat membership service for illegally selling stock market investment advice to the public without a license. Since 2014, AwesomeCalls, Inc. and AwesomeCallsTrading, Inc. have sold memberships for a daily “live chat” service where purported stock trading gurus recommend securities to members and answer personalized questions about investment decisions. The company and its supposed experts aren’t registered as investment advisers in any jurisdiction.
“The COVID-19 lockdown has moved more people online and into day trading, opening the stock market to millions of new entrants. We need to ensure these newcomers have access to existing investor safeguards,” said Attorney General Becerra. “You wouldn’t take legal advice from a fake lawyer, or medical advice from a fake doctor. AwesomeCalls is improperly giving investment and stock trade advice while masquerading as a neutral educational forum. Investment advisers operating without a license will be brought to justice.”
California law defines an investment adviser as any person who is paid to advise others on the value of securities or the advisability of purchasing or selling securities. When working with investment advisers, consumers are afforded multiple safeguards under state and federal law, including but not limited to, prohibitions on certain conflicts of interest, suitability determinations to help assist consumers with investment strategies and financial planning tailored to their needs, and professional examination requirements. In California, investment advisers are accredited through the California Department of Financial Protection and Innovation.
AwesomeCalls continues to sell the following forms of unlawful, unregistered investment advice:
- Publishing daily securities trade recommendations to paying subscription members prior to market open;
- Advising members when and how to execute trades in specific securities during market hours through the live chat feature;
- Providing personalized advice to members about the advisability of specific securities transactions; and
- Broadcasting moderators’ securities transactions in real time to members during market hours.
The lawsuit underlines Attorney General Becerra’s commitment to protect investors from fraud and other misconduct. In August 2020, Attorney General Becerra opposed a proposed regulation by the U.S. Department of Labor that would allow financial advisors to profit at the expense of clients who are saving for retirement. In July 2020, he announced arrests in a global fraudulent investment scheme that robbed victims of millions of dollars with promises of triple or quadruple investment returns. And in March 2020, Attorney General Becerra opposed a proposal by the Securities and Exchange Commission that would expand the SEC’s definition of “accredited investors” to include individuals who weren’t equipped to handle losses from risky non-publicly traded offerings.